Aluminium.pdf (application/pdf Object)
posted by Sandip K. Dasverma @ 1:20 PM
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Panel clears Posco?s captive port in Orissa - livemint
Labels: POSco port sanctioned
posted by Sandip K. Dasverma @ 9:47 AM
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Dark side of mining
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 Hundreds of hectares of forests have been lost to mining over the years in a situation where encroachments are impossible to monitor. The most common illegality is to continue mining long after the lease has ended.
AS the shadows lengthen on Keonjhar's main street, the tube-lit sign above Hotel Arjun flickers to life, illuminating both the entrance to the hotel and the cigarette seller next to it. A traffic policeman walks up to the crossing right outside the hotel and assumes his position at what is the most significant crossing in town. Fifteen kilometres down the road, the ground shivers as a queue of trucks, over a kilometre long, shudders to life. Engine after engine revs up as several hundred trucks begin the next stage of their 325-km journey from the iron-rich Keonjhar district in north Orissa to Paradip port on the east coast. This has been the practice ever since the District Magistrate issued orders prohibiting truck movement between 8 a.m. and 8 p.m. Further up, the highway narrows into the first of many bottlenecks, and branches off, capillary-like, into un-metalled paths that lead into the heart of the district's iron ore mines. Across the Baitarani river, in Joda, Barbil, Deojhar and Thakurani, the low mountains are illuminated by high-powered halogens, as work continues at a relentless pace in the mines - visible as raw, red gashes on the otherwise thickly forested mountainside. The source of an estimated 35 per cent of India's total reserves of haematite, Orissa produced more than 46 million tonnes of iron ore in 2004-05, of which three quarters came from Keonjhar. Almost all of it was, and still is, carted away in nearly 30,000 trucks from the 119 mines that dot the district. The trucks move north from Joda, to the Jharkhand border where they supply ore to Jharkhand's rapidly expanding steel industry, and northwest to Haldia port. But the majority move south through Keonjhar town towards Cuttack and cut through to Paradip port, from where the ore is shipped in containers to one of the few countries that have a bigger appetite for steel than India - China. Initially seen as the engine of an independent India - the first "swadeshi" steel mill was completed in 1920 by the Tata Iron and Steel Company at Jamshedpur in present-day Jharkhand just across the border with Orissa - it was cast into the shadows by the shining "new economy" of the 1990s. A five-year rally in international prices has seen the iron and steel sector make a strong return on the business pages of newspapers. Prime Minister Manmohan Singh pointed out in his keynote address at the India Steel Summit 2007: "In the last five years, the production and consumption of steel has grown at rates exceeding 9 per cent per annum. The pace of growth has further accelerated in the current year to over 10 per cent." The recently formulated national steel policy has set the production target for 2020 at 110 million tonnes of steel, and a doubling of the present capacity from around 40 million tonnes to 80 million tonnes by 2012. A buoyant national economy and a booming construction sector are expected to add to the optimism in the steel sector, and nowhere is this felt more than in the office of Padmanabha Behera, Orissa's Minister of Steel and Mines and Planning and Coordination. "We have signed 45 MoUs [Memoranda of Understanding] till date," he told this correspondent, "and production has already started in 23." The Minister foresees a resurgent Orissa, propelled forward by his party's mantra of "progress through industrialisation". Behera believes that Orissa's future lies in using its vast mineral wealth to generate employment and, of course, create wealth. However, not everyone in the State shares this vision. Privilege and corruption
 Work apace on Jindal's 9-km-long pipeline along the road to Deojhar to draw water from the Baitarani river. The State Water Department had asked the company to stop the work and government officials initially insisted that all work had stopped. But later they said the matter was under litigation.
To understand Orissa's trucks is to understand how privilege and corruption operate along dense, intricate networks where the legal and the illegal often overlap, making it impossible to make a concrete accusation. After all, what is an illegal mine? How can it be identified? "It is hereby declared that it is expedient in the public interest that the Union should take under its control the regulation of mines and the development of minerals to the extent hereinafter provided," states the preamble to the Mines and Minerals (Development and Regulation) Act, one of a raft of laws and bylaws passed to govern the mining sector. First enacted in 1957, and amended almost every four years up to 1999, the MMDR Act serves as the central axis on which mining law is framed. The Act classifies minerals into "minor" and "major" lists, lays down procedures for the granting of reconnaissance permits, prospecting licences and mining leases, and classifies violations and encroachments. While States have complete control over all minor minerals such as clay, gravel, sand and building stones, major minerals such as iron ore come under the purview of the Central government. For such minerals, Central permission is required prior to the granting of licence. Apart from the MMDR Act, mining is subject to The Mines Act of 1952, the National Mineral Policy (amended in 1994), and a slew of laws concerning land acquisition and environmental assessment. Acquiring a mining lease for a major mineral like iron ore or coal for a particular area is relatively easy now. The process has been simplified over the last 10 years, a development that has coincided with the liberalisation of the mining sector. Mining leases are granted on a `first-come, first-serve' basis, and the foreign direct investment (FDI) policy of 1999 allows for "up to 100 per cent foreign direct investment" in the mining and processing of minerals other than diamond, precious stones and atomic minerals. Thus, mining occupies a unique governmental space that is simultaneously highly legislated yet remarkably free of constraints for mine operators. Under the laws governing mining, mines could be declared "illegal" on a number of grounds, the most obvious being that of mining in an area without applying for a lease. However, the pressure of rapid industrialisation has forced State governments to curb such practices. Illegal mines
"No illegal mining is possible without political patronage," says a senior officer in the Directorate of Mines, "and local politicians have realised that the land occupied by illegal miners can just as easily be handed over to giant corporations for similar favours." This is not to say that outright capture of areas for mining has stopped entirely in the iron belt. The most common examples of illegal mining occur on the boundary of legality, where the violator can claim a degree of innocence on the basis of ignorance of the law. The most common form of illegality is to continue mining long after the lease has expired. A document obtained from the Directorate of Mines under the Right to Information Act provides a complete list of mining leases in Keonjhar. According to the Directorate's own figures, dated December 31, 2005, as many as 52 out of 119 mines, or more than 40 per cent of all mines in Keonjhar district covering 52 per cent of leased area, operate illegally on expired licences. Of these 52 mines, 10 belong to the Orissa Mining Corporation (OMC), a government-owned enterprise, and operate on 7,051 hectares (1 hectare = 2.47 acres) or a fifth of the total area under mining in the district. Many in the industry argue that the issue of expired licences is not an indication of corruption per se as the government has been dragging its feet for years over their renewal. The failure to renew leases, particularly those held by a State-owned corporation, seems inexplicable until one unpacks the terms of the mining lease. As pointed out by Ritwick Dutta in a compilation titled "Undermining India", the renewal of mining leases in forested areas has been the subject of much litigation since the enactment of the Forest Conservation Act of 1980. Given that most mines, including those in Keonjhar, fall within the purview of this Act, the key question was whether the renewal of a mining lease required fresh permission of the Central government. The Supreme Court, in successive judgments, particularly in State of Tamil Nadu vs Hind Stones in 1981 and Samatha vs State of Andhra Pradesh in 1997, has ruled that the renewal of a mining lease is actually the grant of a fresh lease. Thus, a good reason for mining companies and associated State officials to go slow on the renewal of leases could be that, theoretically, the company shall have to reapply at the time of renewal and would be subject to monitoring by the Central Pollution Control Board, the Ministry of Environment and Forests and a host of other agencies. Forest Act and mining
The Forest Conservation Act mandates that the Central government shall after careful examination of the proposal denotify forest land earmarked for mining and the mining company shall be subject to a series of restrictions to minimise the ecological footprint of the mine. It is also a useful tool to ensure that the mining companies stay within the areas allotted to them. Of course, the Forest Act, like any other Act, is only as good as its implementation. Another document from the Directorate of Mines lists 40 mines in Keonjhar that are operating without clearance from the Forest Department; the OMC, once more, is one of the worst violators. District Forest Officer P.N. Karat says that as of February 2006 all such cases have been dealt with. However, this assessment is impossible to verify independently. In the absence of firm leases, many companies have been granted temporary licences, most of which are issued without guidelines or monitoring. The absence of adequate monitoring is probably the most disturbing feature of the industry in Orissa. The highly technical language adopted by both the mining companies and the state effectively silences any local articulation of opposition by people directly affected by the projects. Thus, people's testimonies of a change in the colour of groundwater, an increase in the cases of asthma and respiratory conditions and a drop in the fertility of their fields are discounted in favour of Suspended Particulate Matter (SPM) readings collected by the State Pollution Control Board (SPCB) and the findings of groundwater studies conducted by the State Groundwater Board that pollution is present but is within the mandated safety limit. Barbil, to cite just one example, is a small town in the heart of the mining belt where it is difficult to breathe freely even during the day when the trucks do not run. But a study obtained from the SPCB states that the SPM readings in Barbil are "only" 456 micrograms per cubic metre against a reference value of 500 micrograms per cubic metre for mining areas, and so is acceptable. However, the Central Pollution Control Board reference value for "residential and rural areas" - which villages outside the mines are - is 200 micrograms per cubic metre and for a reserve forest, which could be classified as a "sensitive area" under the SPCB guidelines, it is 100 micrograms per cubic metre. Thus, the same arbitrarily fixed "standards" used to declare mining areas "pollution free" can just as easily be used to declare them unfit for human habitation. Similarly, the only way to verify if a mining area corresponds to the area mentioned in the mining lease is to either refer to detailed contour maps in the possession of the government (and hence unavailable to the general public) or physically plot the coordinates of the mine using a global positioning system (GPS), which no one in Orissa has access to. Such opacity on the part of all privilege-holders in the system makes its impossible to level definite accusations against any party. But, as in all camouflaged sites, in Orissa, too, the veil slips occasionally to offer a glimpse of the arrogance of mining corporations vis-à-vis the law. Road to nowhere
 Ferrous dust, one of the biggest polluters in Keonjhar.
The road to Deojhar, as with most roads to hell, is paved with the best of intentions. Ostensibly built to connect Deojhar village to the highway under the Pradhan Mantri Gram Sadak Yojana Scheme, it has turned out to be a useful way to connect the mines to the national highway. Few villagers use this road; there are too many trucks. Of late, the trucks plying on the Deojhar-NH 215 route have had to contend with more than just crater-size potholes - a fleet of bright orange earthmovers engaged in digging deep trenches along the road. These vehicles have been employed by the Jindal company, a consortium of companies with interests primarily in iron, steel and power, to supply water to their 2,000-hectare iron ore mine in the hills above Deojhar village. "Jindal is laying a nine-kilometre pipeline to draw water from the Baitarani river," says Arjun Saraswat, deputy general manager of Sarda Mines Private Ltd., the company that possesses the lease for the Jindal land. "This water will be made available through the soon-to-be-completed Kanpur dam project." At the time of this article going to print, the digging was almost complete and pipes two feet (0.61 metre) in diameter had been laid along a stretch of 4.5 km. But has Jindal acquired the necessary permissions for this pipeline? "The Jindal company's demand for water has been approved `in principle'," says Harish Behera, Engineer-in-Chief (Water Resources) for Orissa. "But the technical parameters are to be worked out. No permission has been granted for any pipeline and, as of now, no project work has begun." Behera is responsible for the allocation of water resources for the entire State, but seems to be unaware that the pipeline work has not only begun but is nearing completion. When confronted with photographs on the project work taken by this correspondent, he said "the matter is currently under litigation". What sort of litigation? For answers, one is directed to C.V. Prasad, Chief Engineer, Project Planning and Formulation, of the Orissa Water Department (Irrigation). Prasad is more forthcoming. "Jindal has been allotted 1,500 cubic metres of water an hour, drawn in a phased manner, from the Baitarani river project, but the project is still awaiting technical clearance. As of now, the construction is in violation of the law," he says. Prasad adds that his office has written to the company several times asking it to stop construction, most recently on January 16. "We were under the impression that construction had stopped." Granting a project approval "in principle" is no indication of its merits or demerits; those are only evaluated in the technical approval stage when a detailed project report (DPR) is submitted. "In principle" approval only indicates that the company may go ahead and prepare a DPR. If Jindal's pipeline does not pass muster the company will be forced to remove it. In going ahead with the project, it believes, perhaps, that government approval is a foregone conclusion or that such approval is of little importance. The Baitarani pipeline also begs another question. At present, where is Jindal drawing its water from? Deputy general manager Arjun Saraswat admits that Jindal is currently drawing water from borewells in their area, but is unwilling to quantify the volume of water drawn every day. "It is only used for domestic purposes," he says. However, officials at the SPCB office in Keonjhar reveal that Jindal uses a 10-kilolitre truck to carry out water sprinkling three times a day in the mining area, that is, 30,000 litres of water a day just for sprinkling. Apart from this, the scale of the mining operation, with most of the permanent workers living in the mining area, suggests a reasonably high rate of water consumption even for domestic purposes. Even Jindal probably does not know how much water it uses because none of its tubewells is metered. However, one group of people has a fair idea. Deojhar's sorrow
Down the road from the mines, the residents of Deojhar have seen their streams dry up, the water table fall and the soil lose its fertility in the six years since Jindal began operations. "The very basis of village life has fallen apart since the project began," says Sridhar Nayak, a leader in Deojhar. The crops have died, there is no place to graze cattle, people cannot collect firewood in the project area and the handpumps yield foul, yellowish water. Nayak says the inevitable dust that any project breeds has severely affected the health of the residents, particularly the young, among whom the number of cases of lung congestion has increased. When the project first began, protests were quelled by a combination of cajoling and coercion. A significant police presence was backed by promises of jobs, economic regeneration, security and "progress". Needless to say, none of it has materialised except, of course, the police, who regularly show up in impressive numbers to threaten `errant' residents. The promise of prosperity - schools, hospitals, jobs - is usually the classic argument used to justify the well-documented horrors of mining. Minerals are a country's natural wealth, a gift from Mother Nature, a precious resource crucial to a nation's progress. The booming international market for metals has also cast mines and minerals as earners of valuable foreign exchange. It is hard to unpack the cold, hard logic of capital and corporations without sounding like a hopeless rural idealist. However, the people of Orissa are now asking who the beneficiaries of the mining sector really are. What if mining did not benefit the people it affected the worst? |
posted by Sandip K. Dasverma @ 9:39 PM
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Labels: Janardan Pati - CPM, Orissa on POSCO and SEZ, Secy
posted by Sandip K. Dasverma @ 12:15 PM
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I am not in favour of the idea of setting up of hundreds of SEZs with substantial concessions on capital and other taxes, says, Dr. Bimal Jalan , who was Governor of the Reserve Bank of India from 1997 to 2003 and currently a Rajya Sabha Member. H e has served as Chief Economic Adviser to the Government, Banking Secretary, Finance Secretary, Member-Secretary of the Planning Commission, and Chairman of the Economic Advisory Council to the Prime Minister.
Thank you for your message. Please accept my congratulations for the awards and recognition given to you by several institutions.
I am sorry I have not studied the POSCO project. As such, I am not able to comment on the issues raised by you in relation to this particular project.
However, as a general proposition, I am not in favour of the idea of setting up of hundreds of SEZs with substantial concessions on capital and other taxes. The reason is that the provision of special benefits to projects in SEZs, with permission to sell a substantial part of output in domestic areas, may put ongoing domestic projects in non-SEZ areas at a disadvantage and make them unviable.
So far as land acquisition is concerned, it is not desirable for a state government to get directly involved in the purchase of land for a private company—unless there is an overwhelming public interest in doing so. The "net" public interest has to be evaluated in concrete terms after taking both the costs (including social costs) and benefits (over and above financial outlays) into account.
With best wishes,
Labels: Bimal Jalan, Ex-RBI Governor against SEZs
posted by Sandip K. Dasverma @ 3:29 AM
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| Strong Steel Sector Boosts a Van Eck ETF; Fund Delivers Big Return Amid Industry's Profits, Expected M&A Activity |
| John Spence. Wall Street Journal. (Eastern edition). New York, N.Y.: May 1, 2007. pg. C.11 |
Higher profits at steel companies and expected merger-and- acquisition activity has helped a small and little-known exchange- traded fund deliver some of the year's best returns for the group.
The $70 million Van Eck Market Vectors Steel ETF was up 29.2% this year as of Friday, trailing only SPDR S&P Metals and Mining among exchange-traded funds, according to investment researcher Morningstar Inc.
The Van Eck ETF came to market in October and follows the Amex Steel Index, which is made up of 36 U.S.-listed stocks and American depositary receipts of foreign companies, according to Van Eck Global. Top holdings include Brazilian mining firm Companhia Vale do Rio Doce, Anglo-Australian Rio Tinto PLC, Arcelor Mittal and Posco.
The fund, which has an expense ratio of 0.55%, should be quite volatile given the cyclical industry it tracks and the relatively few number of holdings. Yet the ETF's components have soared over the past few years on higher steel prices, which did pull back during the second half of 2006 and bottomed in this year's first quarter.
In addition to the M&A theme, steel stocks have benefited from increasing demand for basic materials from emerging markets such as China, which are developing their infrastructures. Steel producers have also become more adept at negotiating labor-related issues and improving their cost structures after difficult times, analysts say.
Some analysts contend that big transactions, such as U.S. Steel Corp.'s $2.1 billion acquisition of oil-field-piping specialist Lone Star Technologies Inc., reduce the number of players and should help stabilize prices and production. Ipsco Inc., a maker of steel plate and energy tubular products, recently said it is engaged in discussions that could lead to a potential acquisition of the company.
"As the sector becomes more concentrated, we believe industry discipline will become more institutionalized, which may ultimately lead to higher multiples," wrote Bear Stearns analysts in a recent research note. "It is also possible that given the dwindling number of companies in the sector, investors may be willing to pay a higher multiple for the equities, given their scarcity factor," they added.
As a result, steel stocks have recently attracted the interest of momentum investors and those betting on more M&A activity. "This used to be seen as an ugly space to be in, but now it's sexy," said UBS analyst Timna Tanners, who added that investors are willing to pay more on a multiple basis for the same earnings.
Fund Directors: More Pay,
But Also More Work
Mutual-fund directors earned 15.5% more in 2006, their fifth consecutive year of double-digit pay increases, according to Management Practice, a consulting firm that specializes in advice to fund boards.
Among the largest fund companies when measured by assets, annual median compensation for fund directors was $171,775 in 2006. In the survey for 2005, median annual compensation at the largest fund families was $147,000.
The increase in pay comes as more focus is being paid to the job that directors do in looking out for the shareholders that they serve, the report said. "The need for specialized, knowledge-specific fund directors has driven overall compensation to record levels," the report said.
Still, the report said, the overall cost to shareholders remained low. The average cost to shareholders was $15.40 a year per $1 million in assets. In the 2005, that cost per $1 million was $16.10. The survey of 1,967 directors at 337 fund families found that 81% of directors are independent. The survey also found that the chairman of the board was independent 60% of the time, up from 50% last year, even as the Securities and Exchange Commission continues to struggle with whether it should mandate an independent chairman.
-- Tom Lauricella
Labels: WSJ Article
posted by Sandip K. Dasverma @ 2:29 AM
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| Land Mine: In India, Clashes Erupt As Industry Expands; South Korea's Posco Wants Farmers to Move; Mr. Sahoo at Barricades |
| Peter Wonacott. Wall Street Journal. (Eastern edition). New York, N.Y.: May 21, 2007. pg. A.1 |
DHINKIA, India -- A couple of weeks ago, a controversial plan by a South Korean company to build a steelmaking plant on a sandy stretch of land here seemed to be gaining support, even among poor farmers who would be displaced.
Posco executive Gee-Wong Sung chatted with farmers, chewing betel leaf with them until his lips turned bright red, and sought out the support of local Hindu priests. When villagers asked for new roads and bridges, he quickly agreed to build them.
But 10 days ago, a group opposed to the project seized three of the Korean steel company's employees, assaulted two, and held them for several hours. The incident rekindled anger that has polarized the area ever since Posco, proposed to take over thousands of acres for a giant plant in this part of eastern Orissa state. "The complexion of the area has changed. The anti-Posco movement is increasing," says Tamil Pradhan, a supporter of the project, which at an estimated $12 billion is the largest industrial investment in India planned by a foreign company.
India -- divided between a poor rural population and a growing but still-small tech sector -- is trying to fill in a largely missing economic piece: an industrial manufacturing sector. But industrial operations need large tracts of land. And acquiring and emptying these tracts is tough in a crowded country that, unlike next-door China, has competing political groups and powerful networks of social activists.
Across India, conflicts have erupted over proposed mines, chemical plants and auto factories. Canada's Alcan Inc. said last month that it was withdrawing from a mining and refinery venture that has endured years of protests from residents unwilling to vacate land for it. An Alcan spokeswoman denied that project delays affected the decision to sell its share of the joint-venture with Indian aluminum giant Hindalco Industries Ltd. Though Hindalco says it has first right to purchase, Alcan hasn't announced a buyer for its stake.
The resistance is a problem not just for corporations but also for India's government, which has embraced a strategy of industrial growth yet struggled to prevent parts of the population from ending up worse off than before. Although the Indian economy's overall growth rate is a booming 9% a year, it's only 2% in the large agriculture sector. Two-thirds of the population is still in these rural areas. A third of Indians live on $1 a day or less. Officials would like to see more of them in industrial jobs, but the transition has been troublesome.
Many Indians are dubious of government promises of compensation for giving up their life on the land. And the nation's colonial past makes them suspicious, as well, of foreign companies drawn to India's rich resources and cheap labor.
Not all companies have protracted problems acquiring land in India. Flextronics International Ltd., a Singapore-based contract manufacturer, set up a plant in six months in the southern state of Tamil Nadu. Gururaj Ayekavadi, general manager of Flextronics India, says the local government made land available and handled relocation of residents, and the plant now employs 2,000.
But elsewhere, social activists and leftist politicians are tapping into rural anger to challenge the economic opening. Militant Maoists are also picking up support among disaffected rural residents, according to Kavaljit Singh, director of New Delhi's Public Interest Research Centre.
India has a history of disturbances related to land acquisition, most notably in big dam projects in the 1990s. As developers stake out property, though, new strains have surfaced over the sometimes heavy- handed methods of moving people, according to Rita Ray, a professor of Sociology at Utkal University in Orissa who studies resettlement issues. "Policy implementation has been very poor," she said. "The entire government machinery has to get involved and that's been very problematic."
From a breezy bamboo grove inside the village of Dhinkia, Abhaya Sahoo, a leader in the Communist Party of India, coordinates a coalition that is trying to outmaneuver Posco. Rejecting any contact with the world's third-largest steel company, he has barricaded the village and threatened to send out children as the first line of defense in the event of a police raid. "We've come to the point of no return. We must save our soil," says Mr. Sahoo, sitting cross-legged as he works on a manifesto called "The Posco Peril."
Lined up against him is Mr. Sung, manager of Posco's project here. No construction has yet begun on the steel project, which is many months behind schedule. Posco executives say they're committed to it but have told Indian officials they'll explore other options if they continue to face delays.
Mining and metals companies want to be in India, both for the market and for the mineral wealth. India has among the world's largest reserves both of bauxite, a raw material for aluminum, and of iron ore, for steel. Last year the government said steelmakers alone signed 116 memorandums of understanding, for projects that could eventually result in $80 billion of investment and a quadrupling of India's steelmaking capacity.
The government has been setting up special economic zones that offer tax breaks, relaxed labor rules and expedited business licenses. It estimates the 99 zones established so far have spawned 35,000 jobs.
But clashes between police and residents over land acquisition recently led to some scaling back. In April, the ministry of commerce limited the size of economic zones to 5,000 acres. It earlier promised not to take fertile farm land. A national policy, drafted last year though not yet adopted, would require Indian states to conduct social- impact surveys, set up committees to monitor relocation and compensate landless laborers, not just property owners.
Such consideration of local wishes contrasts with practices in authoritarian China, where the government decades ago swiftly shifted farmers off land to create massive economic zones such as the entire city of Shenzhen. "India is a democracy. People own the land. If we wanted a zone the size of Shenzhen it would take us 30 years." says India's secretary of commerce, Gopal Pillai.
The Posco project was contentious almost from its beginning two years ago. The South Korean company's initial plan was to acquire 5,000 acres, relocating thousands of families. Facing opposition, it revised this to 4,004 acres, all but 435 of them government-owned.
Mr. Sung set about winning local support with a time-tested sales pitch. He said the plant, built in stages, eventually would employ 18,000 people. Posco envisions it at the center of a regional business hub as new roads, rail lines, a seaport and three dedicated iron-ore mines would spur investment and trade. Over three decades, Posco says its project would help create nearly 900,000 jobs. "This is a megaproject -- we need manpower," he says.
He set up an office in a school building and, with a mix of Korean and Indian executives, began paying visits to the area's villages to drink tea and pose for pictures. He chewed Paan -- a bundle of spices wrapped in a betel leaf -- "more than 100 times," he says, making a face.
State officials agreed to an initial sale of more than a quarter of the needed land for $53 million. Posco also won approval for a special economic zone surrounding the project.
The remaining 2,900 or so acres have been tougher to acquire. Posco estimated that taking control of them would mean displacing 450 families. Critics said the number was 10 times that. On the 435 acres that are privately owned, many owners said they wouldn't sell. Mr. Sung says Posco, which has already scaled down the project's size and repeatedly redesigned the layout, isn't willing to walk away. "We need some private land. We have to put more effort into persuading the villagers," he says.
Mr. Sahoo, who like Mr. Sung is 48 years old, is behind much of the opposition. The state government and Posco said the targeted land -- a flat, sandy expanse just off the Bay of Bengal -- was largely barren. Mr. Sahoo set out to prove them wrong. He described the soil as "sweet sand" that supports betel vines, cashews and coconuts. Residents of Dhinkia have kept Posco contractors from entering the village to do topographic surveys and social and economic studies that might confirm the company's views.
From his cot under a grove of bamboo, Mr. Sahoo receives other activists and politicians who come to Dhinkia to support the anti- Posco cause. Part of his argument is that although life isn't easy for people making a living on the land, they have intangible benefits such as a clean environment, fresh food and the ability to live together in extended families. "Big companies in air-conditioned rooms can't see the sunshine," he says, his face glistening with a light sweat. "The standard of living here is very good."
Residents don't have to look far to see what can happen when land is lost to an industrial company. In the nearby village of Trilochanpur, Indian Oil Corp. bought 3,350 acres seven years ago for a $6 billion petrochemical complex. The $2,300-per-acre offer appealed to families who had been shattered by a recent cyclone, says Maheswar Mohapatra, 70. But he says he and many neighbors regretted selling when the money ran out and jobs at the still-unbuilt plant didn't appear.
Indian Oil didn't respond to interview requests. A company executive who says he isn't authorized to speak to the media says there will be jobs when construction on the complex begins next year.
In another case, at a small town called Kalinganagar, the state government tried to force people off land for a Tata Steel Ltd. project. In a resulting battle, a policeman was hacked to death and 12 villagers were killed. Since then, Tata Steel has assumed resettlement duties from the government and has moved about half the people to "rehabilitation colonies" to train them in construction skills, according to company spokesman, Sanjay Choudhry. He says protests have subsided.
The Kalinganagar violence attracted powerful opposition to the Posco project. It includes Mr. Sahoo's boss, D. Raja, secretary for the Communist Party of India, which supports the central government's ruling coalition but is also a frequent critic. Mr. Raja says he welcomes foreign investment in technology, but India is giving up too much to a foreign company in the Posco matter: a captive seaport, ore mines and vast tracts of farm land. "The government shouldn't get into the obsession about foreign investment and let it determine the fate of the country," he says.
In the month after the Kalinganager clash, his party organized anti- Posco protests in Orissa state and New Delhi. Mr. Sung at Posco says friends at other companies advised him not to get too worked up about the demonstrations, because they are common in India. But he says his 85-year-old mother would call him from South Korea after reading about each one and urge him to return to Seoul where it was safe.
Following the Kalinganagar clash, the state drafted a new relocation policy promising compensation, employment and other aid for displaced families even if they didn't own land they farmed or even if they encroached on government property. Some locals suspected a ploy. Mr. Sung says, "We would tell them the government will make sure we keep our promises. They would say they don't trust the government."
Other objections to the project also arose. In Dhinkia, farmers said they feared that a steel plant beside a proposed petrochemical complex would damage the ecology, hurting farm incomes even for people outside the project area. "Posco would be taking our good air," says Pramila Mohapatra, 55. A 12-year-old village girl nods, saying she would march to the front lines with other children to resist eviction.
As tensions rose last year, the Communist Party's Mr. Sahoo prepared villagers against a possible attempt to evict them. They erected barricades and dug trenches, including deep troughs in the road that force entering vehicles to slow. When workers associated with the Posco project arrived to try to do topographic surveys, villagers chased them off with bamboo poles.
The local police superintendent says he is compiling a charge sheet against Mr. Sahoo that includes forcibly restraining public servants who visited the village. But with the risk of violence high, he isn't making arrests now, says the official, Y.K. Jethwa. He has advised Posco to avoid Dhinkia. In these insular communities, some locals who favor the steel project call Mr. Sahoo -- who grew up in a village about a couple dozen kilometers away -- an outside troublemaker. They say he has little to lose from resistance, but to support his political agenda he's depriving a great many of the project's potential benefits.
"Why are we cut off from Posco? If we talk to them we could at least make our own demands," says Mr. Pradhan.
Posco's Mr. Sung, unable to talk to plant foes in Dhinkia, printed 100,000 leaflets to insert in local newspapers. A distributor friendly to protesters removed them. Barred from the village, Mr. Sung invited residents to come to see him. He says some who did come revealed new suspicions, one farmer asking him: "Are you spies for America?"
Violence elsewhere hurt Posco's cause in March. An attempt to establish a special economic zone in the West Bengal hamlet of Nandigram brought a battle between police and farmers armed with machetes and bricks. Fourteen residents were killed. The West Bengal chief minister accepted blame for rushing development and canceled plans for the economic zone.
In the wake of that clash, Indian Prime Minister Manmohan Singh met with the top official of the Orissa state government. Afterward, Posco was urged to negotiate acceptable land-acquisition terms directly with the farmers. The order presented a quandary for the company: How to expand local support if it's supposed to avoid volatile areas.
Around that time, Mr. Sung had begun lobbying local Hindu priests. In his visits to village temples, Mr. Sung says he would tell them, "Posco needs peace. Please pray for peace" A group of village leaders this month warmed to the company's plans, provided certain demands were met.
Mr. Sung was elated. "It was the kind of moment where I thought we could overcome," he says. "As an engineer, I could start my work."
Then came the kidnapping of Posco employees on May 11, a stinging setback. Despite threats from villagers in Dhinkia, Mr. Sung returned the next day to an adjacent project area to meet with locals. Before he departed, his mother called, once again asking when he would be home in South Korea.
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posted by Sandip K. Dasverma @ 2:23 AM
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Document View
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| Politics & Economics: Posco Says Tumult Won't Halt Plans for Steel Facility in India |
| Peter Wonacott. Wall Street Journal. (Eastern edition). New York, N.Y.: May 14, 2007. pg. A.6 |
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| Abstract (Document Summary) |
"We have a positive hope that we can convince them to sell the land," said Gee-Wong Sung, the head of the steelmaking project for Posco-India, a unit of the world's third-largest steel company by output. "But if they don't want to sell," he said, "we can't force them." The protesters escorted Mr. Das and the two other Posco employees to the village of Dhinkia, the heart of a movement opposing the project. A female Posco employee was quickly released. But the two men weren't let go until early Saturday morning, after they signed a statement promising not to return, according to Mr. Das and the leader of the anti-Posco movement, Abhaya Sahoo. |
| Full Text (409 words) | ||||
| (c) 2007 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission. NEW DELHI -- Irate villagers who briefly detained three Posco employees during the weekend in India's eastern state of Orissa won't deter the South Korean steelmaker from efforts to buy land in the area for a $12 billion project, a senior Posco executive said. "We have a positive hope that we can convince them to sell the land," said Gee-Wong Sung, the head of the steelmaking project for Posco-India, a unit of the world's third-largest steel company by output. "But if they don't want to sell," he said, "we can't force them." Posco aims to acquire about 4,000 acres of land to build a facility able to produce 12 million metric tons of steel a year in what would be one of the biggest foreign investments in India. The plant is to be linked to the world with new roads, bridges and a dedicated seaport. Iron ore, the major steelmaking ingredient, will come from nearby mines. But the government's drive to acquire more rural land for both industrial projects and newly formed special-economic zones has sparked a series of violent incidents. The protests have forced the central government to re-evaluate some of its policies for acquiring such land, and it now encourages companies to negotiate with rural residents directly instead of purchasing property for them. Posco's plans represent a high-profile test of that new policy. Three Posco employees were visiting the proposed project site Friday afternoon when their car was surrounded by villagers wielding bamboo poles and a window was smashed, according to Choudhury Pranavananda Das, a public-relations executive with Posco and one of the three who was detained. The protesters escorted Mr. Das and the two other Posco employees to the village of Dhinkia, the heart of a movement opposing the project. A female Posco employee was quickly released. But the two men weren't let go until early Saturday morning, after they signed a statement promising not to return, according to Mr. Das and the leader of the anti-Posco movement, Abhaya Sahoo. "We told them that this was between the government and the people," Mr. Sahoo said in a telephone interview. "Why did they have to come?" Posco's Mr. Sung denied that the incident might prompt the company to abandon its plans to build in the area, though he said it is considering its options. No arrests have yet been made in connection with the incident, according to Y.K. Jethwa, the superintendent of police for the Jagatsinghpur district.
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posted by Sandip K. Dasverma @ 1:52 AM
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posted by Sandip K. Dasverma @ 1:31 AM
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The Telegraph - Calcutta : Business
Orissa beckons auto ancillaries | |
| PRABUDDHA S. JAGADEB | |
Bhubaneswar, May 20: Orissa is emerging as an auto component hub. Officials of the state government said the expected investment in the sector would be more than Rs 2,000 crore. Already two companies have signed MoUs with the state government, while two others are interested in setting up shop. UK-based CHK Plc, maker of fabricated steel components and autolegs — a product patented for use in heavy transport — is keen on a facility in the state. “Preliminary talks are on and we hope something concrete comes up in two to three months,” said A.K. Meena, managing director of the Industrial Investment Promotion Corporation of Orissa (Ipicol). Meena, who had been to the company’s headquarters in the UK last year, said a delegation had visited Orissa in February and inspected sites in Choudwar and Khurda. “They can set up a manufacturing unit of auto forging and autolegs,” he said. Ramakrishna Forgings (RFL) is also interested in Orissa. “RFL has a manufacturing facility in Gujarat and they have expressed an interest to establish a unit near Choudwar,” said B.N. Palei, general manager (outreach and promotion) of Ipicol. “We are in talks with RFL’s chairman M.P. Jalan and hope the group decides to invest here,” said Palei. Ipicol is trying to get more investment by highlighting the availability of quality iron and steel, aluminium and steel flat products and rounds. Institutes such as the Central Tool Room Training Institute, Central Institute for Plastic Engineering and Technology and Indian Institute of Foremen and Training can provide the manpower and R&D support to the industry. Officials said the automobile and auto-component industries would create more jobs than the steel industry. The Industrial Infrastructure Development Corporation is planning to set up a hub at Choudwar. The RSB group, an engineering and components manufacturing company, signed an MoU with the state government in December to set up a Rs 360crore multi-product facility at Choudwar. The company has started the process of acquiring 300 acres of land. The project, to be set up in phases, will have a forging unit, an iron casting unit, aluminium die casting unit, machine shop and assembling unit. RSB group chairman R.K. Behera said the unit would serve Tata Motors. “Absence of a ‘mother’ automobile plant in the neighbourhood is a difficulty,” Meena said. He said Ipicol is now targeting units in the small-scale sector. “Ipicol will try to hold a roadshow for prospective investors in Ludhiana. By projecting our strengths in metals and minerals, we can attract more manufacturers to set up base in Orissa.” he added. |
posted by Sandip K. Dasverma @ 11:55 AM
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Mr Srikant Jena
Former Union Cabinet Minister and Senior Congress Leader
Dear Mr Satpathy,Thank you for this kind of initiative.I hope this platform can help in making a meaningful debate on different issues concerning the state. Nalco disinvestment is on hold now by the govt of India.Though the govt has
not totaly yilded to but on political compulsion kept it on hold and I think it is not posible again for the govt to proceed inview of the resistance from UPA partners and also from within the Congress. Nalco is not only profitable but highly a profitable psu right from its inception.For the last 25 years it is making a huge profit. It is pfrofitable because Nalco gets its main raw material 'BAUXITE' IN ALMOST FREE FROM ORISSA.
Orissa posess 71%of Bauxite deposit of the country.Orissa does not get the right share from the nalco's profit rather Orissa loses in all fronts. Yes, someone may argue, afterall its a national project ,so the profit must go to the national exchequre.True. then why we only discuss about nalco's health not others ?
Now ,in the last 3years Orissa govt has handedover the most valuable buxite mines to three major private players almost free(officially)VEDANT, UTKAL ALLUMINA BIRLA GROUP AND ONE FOREIGN COMPANY BILTON.TOTAL DEPOSIT AS PER THE GOVT'S ESTIMATE OF THESE THREE DEPOSITS IS NEARLY "5LAKH CRORE RUPEE."
News papers and other media are captive to these pvt giants.Politicians of allmost all parties are soldout and have converted themselves as bonded labourers of these pvt houses.I am a politician and since i am unable to rescue the state from this kind of loot so you can put me to that catagory also.There are few burocrats who can withstand the pressure and a new trend in burocracy has emerged in recent years perticularly the younger lots are more pliable to to the temptation of these looters.
SO, MY DEAR SACHI ,LETS DEBATE THE LOOT OF THE STATE BY THE THE BIG NEXUS OF POLITICIAN-BUROCRAT-PVT COMPANY IN THE NAME OF SO-CALLED INDUSTRIALISATION IN THE STATE IN A PROPER MANNER WHICH WILL REALLY HELP THE STATE AND WE CAN OVERCOME AND LIBERATE OUR PEOPLE FROM POVERTY.
NALCO DISINVESTMENT IS A SMALL ISSUE COMPARE TO THIS.WE WILL DISCUSS INDEATIL KEEPING POLITICS FAR AWAY IN THE GREATER INTEREST OF THE STATE.PEOPLE RESPONSIBLE IN MAKING THE STATE AS THE POOREST ONE IN IHE UNION OF INDIA MUST BE BROUGHT TO BOOK IRESPECTIVE OF THEIR POLITICAL STATUS OR POSITION.THANKS.
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Dear Friends,I am writing this letter at a very crucial juncture of the state’s history with a host of domestic and international companies rushing the state to loot our minerals. At this hour of crisis, we need to rise above our political differences in the greater interests of the state and the masses looking at us for their well-being.
It is a shame that after 57 years of independence, the state is billed as the poorest state with more than 50% of people struggling to eke out a livelihood. The irony is that all along, we had been tom-tomming about our rich natural and mineral resources. The state’s economy is characterized by lowest per capita income in the country largely due to handing over our high value mineral resources to the private companies and individuals for a song. Here I am presenting below few cases for your information. Iron-Ore: Orissa has a total reserve of 4177 million tons of iron ore, which is about 34% of the country’s total reserve. In the last four years, the booming prices of iron ore have benefited the lease holders and what the state and its people got is just pea nut. I am
citing cases of four major players having iron ore mining leases in the state reeking mind blowing profit.TISCO - This Company has mined about 20 million ton of iron ore in the last four years. It has minted at least Rs.3000 crore only from the iron ore it mined. The calculation has been made on the basis of average ex-mine market
price of iron ore at Rs.2000 per ton. Just take away the royalty of Rs.26 per ton + mining cost of Rs.300 per ton. Adding other expenses, the cost of iron ore at ex-mine will be at best Rs.500 per ton. That means the company made a minimum profit of Rs.1500 per ton of iron ore.A B Birla Group [S L Mines] - Going by the profit as state above, this group, which mined about 12-15million ton of iron ore in the last four years, made a profit of around Rs.2000 crore. Rungta - This Company also had mined about 12-15 million ton in last four
years making a neat profit of about Rs.2000 crore. Jindal [Sharada mines] - This company has also mined
about 12-15 million ton in the last four years making a minimum profit of Rs.2000 crore.
The above four companies have made a whopping profit of Rs 9000-10,000 crore in the last four years. We have not taken the production of iron ore by other companies including public sector SAIL, OMDC and OMC. What Did Orissa Get? The state government got a meager Rs.150 crore as royalty in the last four
years from the above mentioned four companies. The moot question is why and how these companies are allowed to plunder the state? There is an urgent need for a fresh look into the whole gamut of the state government’s mineral policy. The state government has signed MoUs with as many as 36 private companies
>by allowing them to plunder the mineral reserves. The latest entrant to eat away our resources is South korean steel major, Posco.
The state government have signed on June 22, 2005 a MOU with Pohang Steel Company (POSCO) of South Korea for 60 crore tons of iron ore. This means a transfer of Rs.90, 000 Crores (Rs.1500 per ton X 60
crore tones) of Orissa’s mineral wealth to the South Korean company at current rupee price of iron ore per ton.
The Japanese and Korean steel plants buy ores globally and so there is a market price of ores. Particularly, POSCO buys iron ore at market prices to produce steel. In 2004, POSCO sold 30 million tons of crude steel for $190 billion with a net profit of $37 billion. From 12 million tons of crude steel POSCO will produce from Orissa’s iron ores per year it can thus generate an estimated net profit of $14.8 billion per year even if POSCO buys our iron ore at prevailing market prices.
Why should Shri Naveen Patnaik agree to sell Orissa’s iron ores to POSCO for 6% of market price fetched by OMC from the same mines slated to be transferred to POSCO, unless, of course, private deals for kickbacks have been made? Such private deals for self-enrichment, going on during the last three decades, have ruined our public wealth, making Oriyas poorest, most illiterate and sickest in India.
Bauxite: Let us consider other minerals too. In the cases of Vedanta, Utkal Alumina of Birlas and others, bauxite pricing was done without taking market prices into consideration. These companies would rake up net profit of over Rupees one lakh crore in the next three decades by exhausting our resources.
Chromite: The state has the monopoly by having 98% of the deposit. Six private companies are making a profit of Rs.6000 crore every year by paying a meager Rs.150 per ton as royalty against the market private of more than Rs.5000 per ton of chrome ore. Again Tisco is making a net profit of Rs.600 to Rs.700 crore every year in chrome ore.
This grave economic injustice to the people of Orissa calls for an open debate on the efficacy of the present mineral policy, which has facilitated the crony industrialist to loot and plunder away our minerals by enriching
a section of ever greedy bureaucrats and vested politicians. Now multinational companies also are eyeing for these reserves. Will Posterity Pardon Us?
Can all of us remain mute spectators to the open loot? Will our posterity pardon us for these grave mistakes if we allow this loot to go on?
LET THE INDUSTRIES BE CAPTIVE TO OUR MINERAL RESERVES, NOT THE OTHER WAY
ROUND.
This is the practice across the globe. Let there be industrialization, but not on the terms and conditions dictated by the private companies.
In the market driven economy, the price of a litre of milk from OMFED you buy is determined by the market forces. So also other commodities.
Why should not TISCO, POSCO, VEDANTA, JINDALS, BIRLAS, RUNGTAS and others >be asked to buy the minerals at the prevalent market price?
Tens of thousands of small sector industrial units are sourcing their raw materials at market price. Even a couple of steel plants in the country are buying iron ore at the prevalent market rate. Why is the state government subsidising heavily these big and large steel manufactures and mine owners?
Orissa would have been richer by at least Rs 40,000 crore had it opted to sell its iron ore at the prevalent market price and could have easily cleared its debt stock of Rs 40,000 crore.I call upon you to seriously ponder over the issues raised above and force the Government to scrap the present mining policy.
The state government must put hold on the implementation of MoUs till a new mining policy is in place following proper debate and consultations with all the stakeholders.
Let the Government come out with a new but progressive mineral policy keeping the public interest in mind by incorporating market price as the benchmark for optimum utilisation of all kinds of minerals benefiting all
the stakeholders. I am sure you will rise above party lines keeping the state interest in view to ensure market price for our valuable minerals.
Let me put few questions arised out of the clarification sought by the then Governor of Orissa Mr Rajendran from the State govt on this issue.
1)Naveen Patnaik Govt's stand is ---Since the 1997 MOU of Mr J.B. Patnaik with Vedant was in force we had no option than to sign an agreement within the framework of '97 MOU.
Question arises -- A)If '97 MOU was in force then why another MOU was signed between Vedant and State govt/OMC in 7th of June 2003 ? B)Is any MOU mandatory legally on any Party? C)Is not the '97 MOU became redundant after 1999 amendment of mineral concession rules by Govt Of India ? 2) Vedant Refinary Foundation stone laying by Mr Naveen Patnaik before one year of agreement--Govt says in its note that it has nothing to do with mining of Bauxite.
Question arises--A)If it is not linked to bauxite mines then it is linked to what? This is not a jewelery shop opening or automobile show room.Without bauxite mines how can that refinary work? Let people know the real story behind the Foundation stone laying ceremony of vedant. Even detective cinema will fail .
''LOOK I AM BRINGING INVESTMENT TO ORISSA AND THESE PEOPLE ARE NOT TOLERATING MY POPULARITY AND TRYING TO MISLEAD THE PEOPLE''.Slogan of
Naveen.
By laying foundation stone of vedant's Refinary before one year of inkikng the agreement what messege Mr Naveen Patnaik wanted to give to the world and perticularly the SHARE HOLDERS OF VEDANT AND ALSO TO THE PROSPECTING SHARE HOLDERS? -That, yes, I as Chief Minister of Orissa solemnly
taking the oath that --
''I AM DOLINGOUT THIS PROPERTY WORTH OF ONE LAKH CRORE OF PEOPLE OF ORISSA
TO MY FRIEND PHILOSOPHER AND GUIDE SRI ANIL AGARWAL WITHOUT ANY FEAR AND
FAVOUR OR CONSIDERATION.
Is it not a fact that after the foundation laying ceremony the vedant share price has sky rocketed and benefited Anil agarwal immensly? 3)The price of bauxite ore-- The State Govt says ---Mining cost +Royalty and other statutary dues to govt is price of Bauxite. To substantiate to that the argument given is Nalco ,Balco and Hindalco's captive mines and its price. If Govt of india's policy is to give bauxite mines to captive user then how could OMC got this mining lease from govt of india?There is no such policy by govt of India that captivity of bauxite ore will be to Industry only. It is only a ploy to escape and confuse the public scrutiny.
The way the State govt has told to press and explained to the Orissa Assemly that----
''NON TENDERING OF BAUXITE ORE IS A MUST. WE CAN NOT INVITE TENDER PUTTING
THE SAME CLAUSE WHICH IS IN VEDANT AGREEMENT .BECAUSE WE ARE IN LONG
NEGOTIATION WITH mR aNIL aGARWAL.( LOOSING ABOUT 50 THOUSAND CRORE TO THE
STATE EXCHEQURE ) AS IF IT IS ENSHRINED IN THE CONSTITUTION OF INDIA FOR
WHICH IT COULD NOT BE PUT TO TENDER.
Question Arises ---A)WHEN GOVT KNOWS THAT NALCO MAKES A NET PROFIT OF ABOUT
1000 TO 2000Cr EVERY YEAR OUT OF A PLANT SEIZE half OF VEDANT THEN WHY AT
ALL THE STATE WENT FOR AN NEGOTIATION WITH VEDANT and Vedant ONLY.
OMC COULD HAVE GONE FOR A REFINARY AND SMELTER.MONEY IS NOT A PROBLEM FOR THIS TYPE OF PLANT WHEN YOU HAVE A CAPTIVE MINESAT YOUR COMMAND. STATE WOULD HAVE MADE A PRNET PROFIT OF 2000Cr EVERY YEAR. mY QUESTION IS WHY THE sTATE OF oRISSA CAPTIVATED ITSELF TO MR ANIL AGARWAL ?
The U.S.A consumes the highest Alumina and Aluminium in the world and to their plants in USA they purchase bauxite from different countries of the world in market price which is now about 47 to 50 usd.The state govt has given the price of bauxite of cement grade not of alumina grdade as 178rupees. The officers engaged in this misleading buisness are really not serving under state but actually working on the pay rolls of these type of
fradulent companies. Some officers have decided to join vedant just after their retirement.
I think the above mentioned issues will be clarified by the state govt in the public interest.
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Labels: Srikanta Jena to Sachi Sathpathy in Orissa Political Forum
posted by Sandip K. Dasverma @ 11:48 PM
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Arise Awake Stop not till the goal is reached. - Swami Vivekananda Swami ji is my inspiration, not as a monk but as a social reformer and for his universal-ism.
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