Where is POSCO headed?

Odisha government has completed land acquisition for plant site but proposed mining in Khandadhar hills might stir up another struggle

By Sayantan Bera
Published: Monday 26 August 2013

A file photo from 2011 shows women and children holding ground in Gobindapur village preventing government officers from acquiring land (photo: Sayantan Bera)

After an eight-year-long wait, South Korean steel giant Pohang Iron and Steel Company (POSCO) made some headway this year in its plans for a $12 billion integrated steel project in Jagatsinghpur district of Odisha. The state government completed the land acquisition in the first week of July after POSCO scaled down its land requirement from 4,004 acres to 2,700 acres (one acre equals 0.4 ha) because of protracted resistance put up by the people of Dhinkia panchayat, the epicentre of protests. POSCO downsized its capacity by a third, from 12 million tonnes per annum (MTPA) to eight MTPA, for the first phase of the project.

The land acquisition, contrary to the claims made by the state government, was far from peaceful. The police resorted to lathi charge several times as residents of Gobindapur panchayat refused to part with their betel vines, their primary means of livelihood. Thirty families from the village have refused to take compensation for the demolished betel vines, informed Prakash Jena of the local resistance group. “The state police has been camping inside the village for the past seven months to create a climate of fear,” he said.

On August 17, addressing a Congress rally in Kendrapara in Odisha, Union rural development minister Jairam Ramesh slammed the state government for delaying the project and “making a mess of it”. People who are losing out land and livelihood because of the project do have genuine grievances with regard to the rehabilitation and resettlement, he said.

Officially, land acquisition might be over for the steel plant site, but there is precious little on ground except some container shacks serving as a site office. More importantly, India’s largest foreign direct investment is yet to have its environment clearance revalidated by the Union Ministry of Environment and Forests (MoEF).

In March 2012, the National Green Tribunal (NGT) directed MoEF to review the project afresh. It specifically suspended the final order or the conditional clearance to POSCO accorded in January 2011, but did not cancel the original environmental clearance (EC) granted in 2007. After a five year period, the EC expired in July 2012. Ironically, the EC was granted on the basis of a rapid environment impact assessment meant for a four MTPA plant, even though POSCO’s land, power and port requirements are commensurate to that of a 12 MTPA capacity plant that has now been reduced to eight MPTA for the first phase.
A few days back, on August 23, MoEF contended before the NGT that POSCO is yet to provide certain information regarding its port project for which the EC revalidation is held up.

“Despite the stay order from the green tribunal, the state administration has been illegally felling trees in the project area,” contends Prafulla Samantara of non-profit Lok Shakti Abhiyan who petitioned NGT and obtained the stay order against POSCO. Samantara has further challenged before NGT the forest clearance given to the project without settling the villagers rights under the Forest Rights Act, 2006. The hearing is due on August 29.

The Odisha government, despite finishing the land acquisition is yet to renew its memorandum of understanding (MoU) with POSCO signed in 2005. The MoU expired way back in June 2010.

Mining in Khandadhar

A breather to the project, however, came through a Supreme Court judgement. In May this year, the apex court set aside an earlier judgement of the Odisha High Court which quashed the state government's recommendation for prospecting licence (PL) to POSCO.

The company applied for 2,500 ha spread across the lush Khandadhar hills in Sundargarh district for its captive iron ore mine. The whopping 600 million tonnes of iron ore bounty remains the crucial factor behind the company’s decision to set up an integrated steel plant in Odisha. The Central government, according to the apex court ruling, will have to take a final call if POSCO will be granted mining lease in Khandadhar.

The Prime Minister’s office has been pushing the big ticket FDI project but granting mining lease to POSCO might take time as it requires hearing out other applicants to the mines. There are 226 pending applications for mining in the Khandadhar hills.
The mining issue might turn into another long struggle as the Khandadhar hills are home to primitive tribal groups like the Paudi Bhuiyan. “The unanimous rejection of mining proposal by village councils in Niyamiri hills  will have a bearing on Khandahar,” says Leo Saldanha of the Bengaluru-based non-profit, Environment Support Group, and co-author of a comprehensive report on the POSCO project—Tearing though the water landscape.

Sundargarh is a scheduled district and, therefore, requires the consent of gram sabha (village councils) for mining projects. If people are allowed to have their say, like in the Vedanta’s proposed mining in Niyamgiri hills, POSCO’s hopes might well be dashed.

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