Posts filed under ‘Vedanta Aluminium Ltd (VAL), Lanjigarh’
Kalahandi & Angul: In the thick forests of western Odisha’s Niyamgiri, the question of whether the mountain should be mined is a more straightforward—and relevant—one for locals than who should rule India come May.
Last year, over the monsoon days of July and August, hardscrabble forest dwellers of the Gouda and Kondh communities in 12 Supreme Court-mandated gram sabhas, or village councils, unanimously rejected a plan to dig up the flat-topped mountain range for a bauxite mine.
The 7sq. km-mine was to feed 72 million tonnes (mt) of ore to an aluminium refinery in the town of Lanjigarh. The refinery was commissioned in 2007 by Vedanta Aluminium Ltd, which had plans to expand production from 1 mt to 6 mt aluminium per year by mining Niyamgiri and then moving on to other bauxite-rich mountain tops within a 60km radius.
On a recent morning in Ijurupa, one of the 12 hamlets where the gram sabhas were held, there was no sign that a national election was just days away. No candidate’s posters were slapped on the walls of the clutch of reddish-brown mud homes. No prime time television shouting matches ran each night in this habitation, without electricity or drinking water provisions. Ijurupa resident Parvati Gouda took a break from harvesting the sickly-sweet smelling, pale yellow mahua fruit carpeting the ground, to say she was unaware of the 15 candidates contesting for her parliamentary constituency—a vast rural terrain of mountains, forests and over 4,000 villages and hamlets spread across the districts of Kalahandi and adjoining Nuaparha, on the border with Chhattisgarh.
“What I will say is that we do not want Vedanta to take our mountain from us,” she said.
Gouda’s family cultivated cotton, sunflower, rice and vegetables on their mountainside farm, perennial streams irrigating their crop in the absence of any other water source. Forest produce augmented food and income, while closely held religious beliefs and practices revolved around nature. The dependence on nature ran deep.
Higher up the mountains in Phuldumer, entirely inhabited by the reticent Dongariya Kondh tribes, questions about the election evoked nonchalance, and those about Vedanta, rage. “Who should one vote for—hatha na shankha na hathi (the hand or the conch shell or elephant—election symbols of the Congress, Biju Janata Dal and Bahujan Samaj Party, respectively),” asked a young man in Kui, an axe resting on his right shoulder, while the beats of village drums for a prayer wafted through the air. “Who is against Vedanta?”
No candidate had walked up here yet to canvass for votes. Along the kutcha roads leading to this hamlet, the structures built by Vedanta as corporate social responsibility outreach stood broken and abandoned, apparently attacked with axes by angry villagers.
A Vedanta spokesperson did not respond to Mint’s questionnaire and calls.
Down below, in Lanjigarh, an occasional campaign jeep rode the streets, fitted with loudspeakers playing songs that emphasized symbols rather than candidates, signalling the absence of formal literacy among rural voters. At the police station, opposite the Central Reserve Police Force (CRPF) barracks and a short distance from the refinery, languid policemen took a break from watching news to show charts listing the polling areas in the mountains as HS, shorthand for “highly sensitive”, or Naxal-affected. Of the 24 completely inaccessible booths in Kalahandi district, 22 are in the Lanjigarh segment.
The gram sabhas of Niyamgiri in some ways marked India’s first environmental referendum, and pointed to the chipping away of prior hierarchies and emergence of new sites of formal power. Views expressed by the villagers in the gram sabhas eventually led the ministry of environment and forests this January to disallow the bauxite mine. The rejection threw into sharp relief a broader conflict afflicting several resource-endowed areas of the country, including Odisha.
New laws passed during the decade-long regime of the Congress party-led alliance, such as the Forest Rights Act (under which the Supreme Court ordered the gram sabhas) and the Right to Information Act, are legally empowering local communities to raise questions and voice opinions, making decision-making more democratic and participatory, but also messier and unpredictable.
A greater scrutiny of corporate actions by non-state actors is also making it less easy to run roughshod over local communities and unilaterally annex the resources they depend on. Simultaneously, governments and companies are increasingly seeking to bring mineral-rich areas under their control as part of larger economic plans. Some resources, such as coal, are essential to meet India’s expanding industrial and consumer demand for power. Others, like iron ore, have presented a quick and often illegal route to wealth and power through profitable raw exports, as pointed out by the justice M.B. Shah Commission’s findings on illegal mining in Odisha, Karnataka and Goa.
Conflicts had become inevitable, Kalahandhi’s sitting member of Parliament (MP) and Congress candidate Bhaktacharan Das said. “But gram sabhas are going to arrest the attention of government and industry,” he added. In a speech in Lok Sabha in 1996, Das, a former Railways minister in the Chandrashekhar government, had strongly supported an aluminium plant in Kalahandi. He now says he opposes mining in Niyamgiri, and backs agro-based industries instead, “which can add value to the district’s Rs.6,000 crore worth of annual agricultural produce.”
Das, who brought Congress vice-president Rahul Gandhi to visit areas in Niyamgiri like Ijurupa in 2008, defended his altered stance: “I never said industrialization should be blind and brutal. When I made the speech, I was concerned about poverty reduction. When I saw the spontaneous protests of the tribes and visited those forests, I realized mining cannot take place at their cost.”
It is not just remote subsistence forest economies that are mounting a challenge to government and industry in India’s most mined state, which holds close to 60% of the country’s bauxite, one-third of its iron ore and one-fourth of its coal. Prosperous settled agrarian villages are not keen to alter their lives for mining either—in the state’s coastal edge protests have been taking place for eight years in villages to be acquired for a steel plant by Posco of South Korea. The proposal represents the country’s biggest foreign direct investment deal, and has been strongly backed by Prime Minister Manmohan Singh.
“Stand-offs, as are taking place in Odisha, are inevitable because mistrust in institutions is high, and it is not misplaced,” said Planning Commission member Arun Maira.
In a reflection of this stand-off, last week, in coal-rich Angul district’s Chhendipada block, nine villages collectively decided they would boycott the 10 April election. The tactic, residents said, was meant to draw attention to their demand that gram sabhas under the new land acquisition law be held in their area so that they could formally register their opposition to being displaced for a coal mine.
The new law, which took effect on 1 January, introduces a consent provision for landowners.
In ministry of coal documents, the nine villages with over 2,500 residents are depicted as the rectangular-shaped Machhakata coal block. The block, for which close to 7,500 acres of land must be acquired, is to be mined by the Gujarat-based Adani Group, eventually generating power for residents of Maharashtra and Gujarat.
In an online presentation from 2012, the Adani Group’s plans show production in Machhakata to begin in 2013, part of the company’s larger plan to increase its coal mining and trading from 36 mt per annum (mtpa) in 2012, to 300 mtpa in 2020.
Chhendipada’s farmers have other ideas. Over the last three years, roadblocks and protests by residents, often turning violent, have ensured that the administration is unable to hold the public hearing as part of the environmental clearance procedure for the mine.
In sharp contrast with the Kondh residents of Niyamgiri, where few had school education or interest in the nuances of law and the contending arms of government, Bagdia’s college-educated residents closely followed shifts in policy. They surfed the Internet, filed Right to Information requests, moved courts and tracked which party was saying what. “The new land acquisition law has been passed, but why is our local Congress MP not supporting it?” asked Bagdia resident and engineering lecturer Satyabrata Pradhan in an interview on a recent afternoon, explaining the boycott decision. “Let the gram sabha consent provision of the new law be applied to us—if 70% of residents say yes to the mine, we are ready to be displaced.”
The new law, Maira argued, could end up amounting to more legally imposed procedures, while not necessarily addressing the fundamental issue of mistrust. “Institutions—governments and corporations—have to alter how they operate to engage with people in a more modern and democratic way. They must listen, and people must see some change in their attitudes. That is the way to resolve these conflicts more efficiently and equitably,” he said.
The mistrust Maira referred to was evident in Bagdia. The village consisted of paddy and vegetable farms, and large mango and cashew orchards, where elephant herds frequently visited from the adjoining Kosala Reserve Forest. With their pucca houses and two- and four-wheelers, the protesting farmers were akin to a rural middle class, expressing as much contempt for subsidies to the poor, as for industrialists and politicians across parties, who they saw as striking private deals and helping each other grow rich (“Why does Modi use Adani’s jet?”, asked one local, referring to a media report about the Bharatiya Janata Party’s (BJP’s) prime ministerial candidate Narendra Modi).
“We are far from the era of Hirakud (the large dam in western Odisha built in the wake of independence), when farmers would be told to make a sacrifice for the nation and be evicted,” said Jagadish Pradhan, a former member of the National Commission for Farmers, referring to the altering grounds of aspirations and rights in rural Odisha, including in his native Kalahandi. “There is a realization now that mining does not even create the kind of jobs and prosperity it promises to locals.”
Figures from the state’s Economic Survey of 2012-13 support Pradhan’s argument: the value of minerals produced in the state increased over ten-fold from Rs.2,776 crore in 2001-02 to Rs.30,204 crore in 2011-12. The sector’s employment in the corresponding period fell marginally from 52,937 to 48,239 jobs, reflecting increased mechanization, according to the report.
“Give us alternative land if you want to take our land, and we will leave,” said Bagdia resident Sujit Garnayak, a 34-year-old farmer. “Why should we give up what will always sustain us for a temporary job in a coal mine?”
Banikanta Mishra, a Xavier Institute of Management professor and a former state planning board member in Odisha, argued that over the past decade, the state government had overly relied on mining for quick royalty revenue to the exchequer, while side-stepping “the more difficult and intensive task of creating growth with a broader and more sustainable base.”
If Naveen Patnaik returns to power in May for a fourth term as the chief minister of Odisha, Mishra said, “I would hope he focuses much more on jobs and incomes, particularly related to agriculture and rural skills, rather than that one big mining project which makes headlines.”
“A well in our village—that way we could harvest a larger produce,” said Ijurupa’s Parvati Gouda, when asked what she desired from her elected representative. “Two tins of sunflower oil would become four tins then.”
BHAWANIPATNA: The Vedanta Aluminium Limited (VAL) is hoping to tide over its raw material crisis at its refinery and smelter units in the state following the state government’s assurance to consider the possibility of bauxite supply from two mines allotted to Larsen and Toubro (L&T).
The move comes over three months after gram sabhas in Rayagada and Kalahandi rejected Vedanta’s bid to mine Niyamgiri bauxite reserves for its refinery.
On Tuesday, Vedanta group chairman Anil Agarwal following a meeting chief minister Naveen Patnaik said the CM assured bauxite for the company’s refinery project at Langigarh in Kalahandi district from L&T’s reserves. In the early 1990s, L&T got prospecting licence for Sijimali and Kutrumali mines, with a combined deposit of about 300 million tonne, in Rayagada and Kalahandi districts respectively. But the state government had then denied mining lease (ML) to it on the ground that the company no end-use plant.
L&T’s executive chairman A M Naik, who was present at the meeting with CM, said his company had signed an MoU with Vedanta for the Rs 12,000 crore joint venture project.
Official sources said the state government has to recommend to the Centre to give ML in favour of L&T so that bauxite could be sourced from the two mines for Vedanta’s refinery. VAL has a smelter plant in Jharsuguda.
Vedanta sources said the company has assured the state government of value addition in the form of alumina and aluminium if bauxite is sourced from Sijimali and Kutrumali through L&T.
If there is one story that contains in it all the reasons why India remains a poor country, it is the story of the Vedanta aluminum refinery in Odisha. Now that economic reforms are back on the government’s agenda, it is a story I hope high officials, high-minded judges and busybody NGOs listen to carefully. Why do I tell it this week? Because earlier this month, Sterlite Industries gave notice that they are closing their Lanjigarh refinery because it is bleeding to death. It has lost Rs 2,500 crores trying to stay alive these past two years. When it closes, 6,500 people will lose their jobs in one of India’s poorest districts.
On a tour of Kalahandi’s villages, during the 1987 drought, I saw poverty so horrific that memories of children dying slowly in barren mud huts remains etched painfully not just in my mind but in my heart. The rains failed that year so the economy based on a single annual crop collapsed and thousands of Adivasi families were forced to live on a diet of birdseed and mango kernels for months. Women started selling babies they could not longer feed.
You would think then, would you not, that if someone was prepared to bring investment to such a desolate place he would be applauded, welcomed with open arms. The very opposite happened and for the wrong reasons. The first people to start protesting against Vedanta were foreigners. Had the refinery functioned on bauxite from the nearby Niyamgiri hills, aluminum could have been produced in Lanjigarh at $1,500 a tonne, instead of the global cost of $2,050. This caused alarm bells to start ringing in the ears of the international aluminum industry and soon powerful foreign NGOs appeared in Kalahandi to stop the project. Greenpeace and Amnesty International are still there supposedly to protect the interests, and sacred hills, of forest-dwelling Adivasi tribes.
The ‘foreign hand’ would not have mattered if the Government of India had not intervened to make the functioning of the refinery impossible in different ways. One of which was to declare that bauxite could not be mined in the Niyamgiri hills. There continues to be confusion about whether this was for environmental reasons or whether it was to protect Adivasis from losing their land. But, once mining was banned, the Orissa Mining Corporation that had signed an agreement with Vedanta to supply it with 150 million tonnes of bauxite, could no longer do so. It has so far been unable to supply an ounce. Vedanta’s environmental, governmental and NGO problems began after an investment of more than Rs 15,000 crores had already been made in the refinery so for two years it functioned on bauxite imported from other states. An unviable situation so the project will now close.
The Adivasis can now go back to living in primitive harmony with nature without schools for their children, without healthcare, without electricity or clean water and without the possibility of ever improving their lives. Will they be happy this way? Only according to urban NGOs who build flourishing businesses on romanticising desperate poverty and a way of life that they themselves could not abide for a single day.
What is interesting about the targeting of Vedanta by such a range of vested interests is that if it were a public sector company, it could have gone ahead and raped the Niyamgiri hills without anyone noticing. It has happened often in the past and continues to happen across the country. So when the Prime Minister sets in motion his new phase of economic reform, he should ask himself why. Could it be because those who would like to see India’s private sector remain the stunted creature it once was would like it to go back to being that way?
Judging from the tirades of NGOs and leftist political parties, this seems to be the case. They want all the country’s natural resources to remain in the hands of the state even if governments lack the money and the technology to exploit them. They appear never to have asked themselves why it is states that are richest in natural resources whose people remain mired in horrible poverty. Sadly they have been able to get away with the rubbish they talk in the name of the poor because the Prime Minister has never explained the need for economic reforms.
If all he can come up with is the kind of speech he made last week about ‘money not growing on trees’, then there is not the smallest chance that the reforms will succeed. The noise made by those who are either economically illiterate or have a vested interest in India remaining a poor country forever is too loud and the mood of negativity they have created too deep. The lies they have told are widely believed.
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Bhubaneswar, Aug 21 (IANS) Sterlite Energy Limited, a subsidiary of London-listed Vedanta Resources Plc, Saturday commissioned the first unit of its 2,400 MW independent power plant in Orissa.
Chief Minister Naveen Patnaik inaugurated the unit of 600 MW at Jharsuguda, 374 km from state capital Bhubaneswar, a senior official of the company told IANS.
The Vedanta group has invested about Rs.10,500 crore for this project that will be among the largest private initiatives in power sector in India, he said.
‘The coal-fired independent thermal power plant is the first of its kind in private sector in the state with its state of the art technology,’ he said.
The plant has employed many environment friendly features, including high contracted slurry disposal (HCSD) with very low consumption of water as compared to wet slurry system, the official said.
The independent power plant would be a zero effluent discharge plant with provision for water circulation and rain water harvesting, he said.
Coal, the raw material for the plant, will be sourced from near by IB Valley coalfield. Power produced from the plant’s first unit will be given to Orissa at a cheap rate, he said.
Sambalpur MP Amarnath Pradhan has demanded the setting up of an Indian Institute of Management (IIM) at Sambalpur.
He said that Sambalpur is the nerve centre of western Odisha and it has the entire infrastructure to facilitate an IIM. Pradhan said that the Union Government should create more opportunities for students in the State by opening at least one IIM in Odisha.
Recently, the standing committee on HRD in its report had asked the Centre to increase the number of seats in the existing IIMs. Pradhan said that as the State is witnessing rapid industrialisation, the necessity for setting up an IIM is increasingly felt. He said majority of the mega projects are coming up in western Odisha and to meet the requirements of these industries, an IIM is very much needed, said the MP.
It may be pointed out that Odisha has all along demanded an IIM and the Ministry of Human Resources Development (MHRD) has never been kind to the State since the days of Arjun Singh. Though Union HRD Minister Kapil Sibal is not having such negative feeling, he has not been generous to the State, said a senior official.
Vedanta Resources Plc, battling criticism from environmental groups and some shareholders over plans to extract bauxite in India’s Niyamgiri mountains, said it may begin mining at the site as early as the end of the year.
“All is going well,” Vedanta Chief Executive Officer Mahendra Singh Mehta said in an interview in London. “It shouldn’t take more than three weeks for the government to decide” on approvals after it receives an environment ministry report scheduled for this month.
The mine, key to Vedanta’s plans to meet its targets to expand refining, has been delayed for more than four years as human rights and environmental groups raised concerns about pollution and the effects on the local tribal community. Vedanta on Feb. 9 said it “strongly” denied Amnesty International’s allegations that residents in the region have been displaced.
Some shareholders also protested against the company’s handling of the affair, with 12.8 percent voting against the remuneration report at the July 28 annual general meeting. Aviva Investors, the fund unit of the U.K.’s second-largest insurer, said it would vote against three resolutions.
Environmental and human-rights protesters gathered outside the meeting, some shouting, “Vedanta, Vedanta out” and others painted blue, like characters from the movie “Avatar” about an alien tribe’s battle to save its planet from a corporation determined to strip its raw materials.
Dutch pension fund PGGM said on July 7 it sold 13 million euros ($17 million) of Vedanta stock and the Church of England offloaded its shares in February.
“Certain NGOs complain that the consultation isn’t complete and human rights issues are raised,” Mehta said. “The fact is that the project has undergone a very vigorous consultation process. We are very positive; it’s taking longer time, no problem. We are in the final approval stage.”
India formed a panel to investigate the potential effect of mining on tribes and wildlife in Orissa, reviewing earlier reports on use of forest land, the Ministry of Environment and Forests said June 30. It would offer findings within 30 days.
“There is no habitation on and near the proposed mining area,” Mehta said. “They are reviewing it once again so nothing is left out.” The hills around the site are about 1,400 meters (4,600 feet) high and nobody lives in the area because there aren’t any bodies of water or vegetation, he said.
Vedanta plans to transfer bauxite from the mine to its alumina refinery, about 5 kilometers (3 miles) from the hills, through a pipeline, Mehta said in an interview on July 28. Aluminum is made from alumina refined from bauxite.
“Laying a conveyor from the mine to the refinery will take about 3-6 months,” Mehta said. “Normally the bauxite transportation is done by trucks, which creates pollution; this is a very environment-friendly way.”
Bauxite in the hills, totaling about 80 million metric tons, is 1 or 2 meters from the surface and the “best in its class in the world,” he said. “You just scrape the surface, no blasting is needed. It could be converted to alumina at a cost far lesser than any of the bauxites in the world.”
Vedanta today reported record first-quarter earnings before income, tax, depreciation and amortization, which more than doubled to $793.9 million from $354.7 million a year earlier.
Anil Agarwal’s projects in Orissa seem to be running into rough weather. His Niyamgiri Hills mining project has received a fresh blow with the Attorney General endorsing the environment ministry’s powers to not give clearance to the project. Agarwal’s other project in Orissa — Vedanta University — seems to be going nowhere. It appears it would take years before the first brick is laid on his most ambitious, and grandest, education project.
Agarwal, founder of London-based Vedanta Group, turned heads in 2006 when he said he would set up an 8,000-acre, $3-billion university under the aegis of Vedanta Foundation (which later changed its name to Anil Agarwal Foundation or AAF) in the state’s coastal town of Puri. He also offered $1 billion from his personal funds. Agarwal’s holding in his companies is worth more than $10 billion (as on 31 March 2010).
However, as with most projects requiring land acquisition, the university project, too, got mired in controversy. On 17 March, Orissa Lok Pal Justice P.K. Patra recommended a vigilance probe against AAF’s land deals. In May, the environment and forests ministry withheld clearance for the university, citing “irregularities, illegal, unethical and unlawful deeds”.
With the odds stacked against it, AAF is weighing other options. “Two states have extended an invitation; a decision is likely to be taken on a new site in two months,” says Ajit Kumar Samal, in-charge of the university project. He, however, refuses to divulge more details. Experts say the alternatives to Orissa could be Tamil Nadu and Andhra Pradesh, which have good educational infrastructure. “Any place near Hyderabad or Chennai would be a good location,” says Narayanan Ramaswamy, head of education practice at consultancy firm KPMG.
The more important question, though, is: is a large university of this kind feasible in India?
Vedanta’s justification for requiring so much land is simple — to build an institution on the lines of Stanford and Harvard. The 8,180-acre Stanford University was established in 1891. Harvard, set up in 1636, is the oldest institution of higher learning in the US, and has about 5,000 acres. But both were set up when land was not a precious commodity. Besides, the US is a far bigger country than India, and can afford to have universities of such scale.
For a densely-populated country like India, 8,000 acres of contiguous land — later scaled down to 6,000 acres — for a university is hugely ambitious. Delhi’s Jawaharlal Nehru University, for instance, has only 1,000 acres. Large universities like Hyderabad Central University and Banaras Hindu University have 2,300 acres and 1,300 acres, respectively. Utkal University, Orissa’s largest, functions in 400 acres.
“In today’s age of high-speed broadband communication, there is no need to be hell-bent on geographical proximity,” says Ramaswamy. The entire knowledge city in Dubai, which houses 30 universities and 450 business partners catering to over 40,000 students, functions well within about 575 acres of land.
Samal doesn’t agree, though. “The architecture is prepared keeping in mind the topography of the place. In Puri, there are no high-rise buildings and hence a ‘horizontal’ plan.”
But now, with Vedanta talking about other states’ interest in the university project, what happens to the 4,000 acres already acquired for it by the Orissa government?
AAF doesn’t seem to have given it much thought. Developing this as an off-campus could be an option. But locals say the land acquisition is just on paper and “the land will continue to belong to those who reside on it now”. Samal says that AAF has spent Rs 100 crore on land acquisition so far. For 4,000 acres, that works out to Rs 2.5 lakh per acre, among the cheapest rates in India. The area is strategically located between Puri and Konark on the sea coast.
Others, too, have got land at cheap rates in Orissa for educational institutes. Harivansh Chaturvedi, director of Greater Noida’s Birla Institute of Management Technology (Bimtech), says that Orissa had offered land at Rs 7 lakh per acre in 2001; Bimtech bought 30 acres for Rs 2.20 crore. Haryana had offered 7 acres for Rs 17 crore. In 1985, Xavier Institute of Management was given 20 acres with a building at Bhubaneswar for free. The institute, in turn, reserves 50 per cent seats for local students.
AAF’s other option is to monetise the real estate by coaxing technology giants such as IBM, Wipro, TCS and Infosys to set up research facilities in the campus. It also wants to invite venture capitalists to fund start-ups doing research projects and develop this as a hub of innovation, in much the same way as Stanford does.
However, this won’t be easy. According to Praveen Bhagdada, manager at Bangalore-based Zinnov Management Consulting, technology companies weigh the pros and cons of an institute before signing up with it. “It is early days yet,” says an executive with a top IT firm.
Companies such as Hewlett-Packard, IBM, Motorola, Mitsubishi and Lockheed Martin are located in the Stanford Industrial Park. Blue-chip companies such as Silicon Graphics, Sun Microsystems and Cisco had begun as ideas in the university’s computer science department.
Agarwal would be hoping for a similar miracle in India. Whether that will happen in Orissa or somewhere else, or whether it will happen at all, is a billion-dollar question.
shalini dot sharma at abp dot in (This story was published in Businessworld Issue Dated 02-08-2010)