Sourcing bauxite from other states to add Rs 600 cr to cost

Bhubaneswar – In what could be a jolt for Vedanta Aluminium Ltd, the fate of the beleaguered proposal to mine bauxite in Odisha’s Niyamgiri Hills was sealed on Monday, with the seventh of the 12 gram sabhas — at Phuldumer in Kalahandi district — rejecting the plan.

Earlier, the first six of the 12 villages in the Rayagada and Kalahandi districts chosen by the state for a referendum on Niyamgiri mining, too, had turned down the proposal.

The remaining five gram sabhas, scheduled for August 19, are also expected to go with the trend so far.

Though the Supreme Court had asked for the gram sabhas’ mandate on the protection of tribals’ religious rights over their presiding deity, Niyam Raja, located at Hundaljali, about 10 km from the proposed mining site, the villagers in all gram sabhas have claimed religious rights over the entire hill range — not just Hundaljali. “The entire Niyamgiri hill range is sacred for us and is the source of our livelihood,” was the common message.

“It is immaterial whether seven or twelve gram sabhas reject the proposal. The negative outcome of a single gram sabha would have the same impact on the project as those of 12 gram sabhas,” says Odisha Tribals Welfare Secretary Santosh Sarangi.

The apex court direction was to preserve the religious and cultural rights of the Dongaria Kondhs at Niyamgiri. If the project, according to the opinion of the tribals in a single village, affected their religious rights, how could that be ignored, he pointed out.

He added, after all the gram sabhas were held, the proceedings and resolutions would be sent to the Union Ministry of Environment and Forest (MoEF), which would take a final view on the forest clearance of the mining project, withdrawn in August 2010 by the then Union Minister Jairam Ramesh.

Bauxite mining in Niyamgiri is crucial for raw material security of Vedanta Aluminium Ltd (VAL), which had set up its one-million-tonne-per-annum Lanjigarh alumina refinery at the cost of Rs 5,000 crore — on the assurance of bauxite supply from this mine, owned by Odisha Mining Corporation (OMC).

A top VAL official, however, said the outcome of the gram sabhas would not have any impact on the mining project. “The apex court had pointed out in its order over forest clearance for the mining project in 2008 that opinion of gram sabhas is required for minor minerals and not for major ones like bauxite, iron ore, etc. The Supreme Court had only asked for settlement of individual, community and religious rights of tribals through gram sabhas. As far as religious rights are concerned, it should pertain to particular places of worship — not the entire hill range,” he said.

He added: “The Lanjigarh refinery is currently running at 60 per cent capacity by sourcing bauxite from outside the state. We also hope to get supplies from Balco’s Kawardah mines in Chhatishgarh soon.

While the raising cost of bauxite at Niyamgiri or mines outside the state works out to the same — Rs 700-750 per tonne — it is the extra Rs 1,600-2,000-per-tonne logistics cost for bauxite secured from Jharkhand, Maharashtra and Chhatishgarh that is bleeding the company now. For its refinery, VAL needs about three million tonnes of bauxite annually. This puts an extra Rs 600 crore burden under the raw material head, affecting the viability of the plant.

The company has applied for 26 alternative mines in the radius of 150 km of Niyamgiri and also urged the state government to expedite processing of OMC’s pending applications, especially those bauxite leases that fall under non-forest areas. These applications are either at the PL (prospecting licence) or ML (mining lease) stage.

The gram sabhas are being held on the direction of the Supreme Court which had asked the state government to the organise these village assemblies to settle the individual and community right claims of the tribals living on Niyamgiri hill slopes and ensure protection of the religious rights of the Dongria Kondhs (an ancient tribal group) vis-à-vis the proposed mining activity.

The apex court had also directed the Union Ministry of Environment and Forest (MoEF) to take a final view on the issue of forest clearance of the project taking into consideration the proceedings of the gram sabhas.

In the lurch

Vedanta will have to source bauxite for its Lanjigarh refinery from other states. A snapshot of impact:

Lanjigarh capacity 1 mtpa Bauxite required 3 mtpa Cost of bauxite Rs 700-750 per tonne Logistics cost Rs 1,600 to Rs 2,000 per tonne Extra burden likely Rs 600 crore annually

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India tribal community set to block Vedanta bauxite project

Jatindra Dash and Krishna N Das

PlanetArk (Reuters)

30 July 2013

Vedanta Resources Plc’s plans to mine bauxite to feed its alumina refinery in the eastern Indian state of Odisha have suffered a blow after a majority of local residents voted against mining around the hills they consider sacred.

Failure to source bauxite from within the state might force the London-listed company to reconsider its 1-million-tonne-per-year plant, which has already been shut several times due to a shortage of the raw material.

The project has drawn the anger of rights groups internationally and highlights the difficult task India faces in balancing economic development with the need to cushion hundreds of millions of poor from the fallout.

Seven out of 12 villages whose opinion the Odisha government sought on the orders of the Supreme Court have rejected mining in the area, a top government official and witnesses said.

“The villagers have so far said no to the mining project,” the official, who requested anonymity as he was not authorized to talk to the media, told Reuters on Monday.

India’s top court in April ordered the state to submit a report based on the views of the villagers to the federal environment and forest ministry within three months.

The ministry, which had earlier opposed the project, would make the final decision two months thereafter on whether Vedanta and partner Orissa Mining Corp Ltd (OMC) can go ahead with mining, the court had ruled.

“People sue-motto (on their own) came to the meeting and spoke against the project in their own tribal languages,” said Siddharth Nayak of Green Kalahandi, an organization protesting against mining in the area.

“The whole Niyamgiri hill is our god and we will protect it at any cost,” Nayak said.

The remaining five villages are to share their views by August 19, the government official said.

“The environment ministry can reject the mining, taking into consideration the decision of even only one gram sabha (village council meeting),” he said.

A ministry official did not immediately comment.

Ajit Yadav, Vedanta’s legal head, told Reuters the company could do little apart from waiting for the environment ministry to decide. He declined to comment on the fate of the project.

“Today’s vote surely means the end of Vedanta’s plans to mine the Niyamgiri hills,” said Amnesty International’s Ramesh Gopalakrishnan, who added that he was present at several of the meetings.

The Lanjigarh plant in Kalahandi district, about 450 km (280 miles) from state capital Bhubaneswar, has been struggling to source bauxite since its commissioning in August 2007.

The company recently restarted the plant after a shutdown of nearly seven months as it sourced bauxite from other states, but executives have said that cannot be sustained unless it acquires the raw material in Odisha.

(Editing by Dale Hudson)

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Niyamgiri Setback – Anil Agarwal might ask for alternate mining site

http://forbesindia.com/blog/business-strategy/niyamgiri-setback-anil-aga...

29 July 2013

Anil Agarwal’s Vedanta Alumina, a unit of the London-listed Vedanta Resources, might ask the Odisha state government for an alternative mining site after its proposed mining project in the Niyamgiri hills range suffered a fresh setback today.

The seventh village, of the total 12, today rejected the mining proposal through a Gram Sabha hearing. Five more villages are still to hold Gram Sabhas but with the majority verdict in, the billionaire might now find it difficult to go ahead with the original plan.

Under Supreme Court’s direction the state government is conducting Gram Sabha meetings in 12 villages of two districts – Kalahandi and Rayagada. The objective is to understand the opinion of natives on a proposed mining project that the London-listed company wants to do along with the state-owned Orissa Mining Corporation. A local unit of Vedanta Resources is partnering OMC.

The two companies, through a joint venture, want to mine on one of the peaks of the Niyamgiri hills. The bauxite will be used by Vedanta’s alumina refinery that reopened recently after being shut for almost a year due to supply constraints in sourcing the raw material. But the natives have argued that the hills are spiritually important for them and any kind of mining will destroy it. The company though contests this and says that the “actual” mining site is 10km away from the “holy hill.”

Once hearing in all the 12 villages are over, independent observers appointed by the state government will write to the Ministry of Environment and Forests. The Ministry then has three months to submit its report to the Apex Court. With the popular opinion against the project, it wont be surprising if the Ministry recommendation goes against the company.

The last two weeks have seen six of the villages unanimously turning down the proposal. The clearance is important for the company to get Stage 2 clearance for the mining proposal. A Stage 2 clearance would grant the mining rights to the Vedanta Resources-OMC combine.

A raging debate has now ensued in the state over the conduct of these meeting. According to Supreme Court regulations, none of the stateholders – including Vedanta Resources and the state administration – should be present during the meetings and try to influence the natives’ opinion. But a local Congress (I) MP Bhakta Charan Das was present in one of the meetings. Interestingly he also heads Green Kalahandi, a NGO that has been protesting the project. It has also been alleged that many other NGOs, including international ones, have been present in these villages and might have influenced the natives.

Amnesty International’s Ramesh Gopalakrishnan is just back in London after spending 10 days in Odisha. “While I was present in the meetings, I didn’t speak. The independent observers, who are judges appointed by the state administration, had no problems with my presence,” he told me over the phone.

He is now getting ready for Vedanta Resources’ AGM on 1st August in London. As in previous AGMs, Agarwal can be sure to face more protests as he conducts this year’s meeting. Many of the international NGOs have already started mobilizing men and resources for a noisy showdown. Proxy shareholders will be in presence to ask the metal king uncomfortable questions. The proceedings in Odisha will only add to heat up the environment.

It is also important to remember that the central Ministry for Environment and Forest had cancelled the stage 2 clearance of the project soon a visit by Congress leader Rahul Gandhi to Odisha. The Saxena Committee, appointed by the Ministry, had made adverse comments on the project. The Gandhi scion had famously promised that the party will take care of the natives’ interest. With the next general elections nearing, cancellation of the mining project will show the party in a good light. Compared to that, Odisha Chief Minister Naveen Patnaik, also leader of BJD that is opposed to the Congress, is banking on these high profile projects to cement his ‘development’ plank. Unfortunately, another key project, that of Posco, has been a non starter. And ArcelorMittal recently shelved its planned project to build a steel plant in the state.

The next twist in the story now will be if Agarwal is able to execute his Plan B – an alternate mining site in Odisha.

Read more: http://forbesindia.com/blog/business-strategy/niyamgiri-setback-anil-aga...

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India: Defeat for Vedanta as indigenous community rejects mine plans

Amnesty International Press Release – link: http://us5.campaign-archive1.com/?u=7dc34c00b8101d17704011d1a&id=0fd40a9...

29 July 2013

The overwhelming rejection, by India’s Dongria Kondh Adivasi (indigenous) communities, of a proposal to mine their sacred lands is an unprecedented victory for indigenous rights in the face of business interests, Amnesty International said today.

A seventh Adivasi village, Phuldumer in Kalahandi district of Odisha state, today voted against plans by Sterlite India,a subsidiary UK-based Vedanta Resources Ltd., and the state-owned Odisha Mining Corporation, for a bauxite mine in the Niyamgiri Hills.

The decision means that a majority of the 12 villages that are being officially consulted by the Odisha authorities have rejected the proposal. The news comes in the same week as Vedanta Resources’ Annual General Meeting (AGM) that will be held on 1 August in London.

“Today’s vote surely means the end of Vedanta’s plans to mine the Niyamgiri Hills – a project that would violate the community’s economic, social and cultural rights and almost certainly their rights as Indigenous peoples. After struggling for a decade against the threat to their way of life, the Dongria Kondh have now finally been able to assert their right not to consent to the mine,” said Ramesh Gopalakrishnan of Amnesty International who witnessed, as an observer, several of the village council meetings that rejected the mine plans over the past two weeks.

“Shareholders at Vedanta’s AGM should now ask serious questions as to why the company continued to pursue the project despite evidence of the harm it would cause to indigenous people.”

Under both Indian law and international human rights standards, indigenous people have special protections to ensure that their traditional lands and way of life are not destroyed. The principle of Free, Prior and Informed Consent has been established to guarantee that there is proper consultation with indigenous communities and that their rights are fully respected.

In a related development, India’s Ministry of Tribal Affairs announced on 27 July that it would assess claims made by more than 100 villages that have been excluded from the official consultation process. The decision by the Odisha authorities to restrict the number of villages to only 12 has been criticised by the Ministry and civil society, including Amnesty International. The Ministry’s five-member team is scheduled to visit the Niyamgiri hills during 5-8 August.

“The Odisha government should ensure that all communities whose rights may be affected by the mine are able to have their say”, said Gopalakrishnan.

This consultation process is the first of its kind in India,and is the result of a landmark ruling by India’s Supreme Court in April 2013 that stated that village assembly meetings of villages in the affected area would need to decide if the mine plans, in any way, affected their religious and cultural rights.

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India: ‘No mining project at any cost’

http://www.thehindu.com/todays-paper/tp-national/tp-otherstates/no-minin...

Tribal people express their opinion at fifth gram sabha held at Palberi village

26 July 2013

BHUBANESWAR – The tribal men and women who participated in the gram sabha held at Palberi village in Kalahandi district on Thursday rejected the proposed bauxite mining project in Niyamgiri hills.

The gram sabha passed a resolution to oppose the proposed mining tooth and nail, with the residents claiming that Niyamgiri was their revered deity and source of their livelihood.

Out of 15 eligible voters, 14 persons with equal number of male and female who took part in the gram sabha claimed their religious and cultural rights over Niyamgiri hills.

The tribals, who had been opposing the proposed bauxite mining by Odisha Mining Corporation and Vedanta Aluminium Limited since long, said at the gram sabha that they would not allow any mining activity on the Niyamgiri hills at any cost. The gram sabha at Palberi, which is the fifth in the series, was held in the presence of Additional District Judge Pramod Kumar Jena amid tight security.

After the Supreme Court passed an order for conducting gram sabhas in Niyamgiri area to ascertain whether mining in Niyamgiri hills was against the religious beliefs of the tribals, the State government had decided to facilitate gram sabha only in 12 villages. The Niyamgiri Suraksha Samiti, however, had demanded that gram sabhas be held in all the 112 villages instead of 12 villages.

The tribal men and women who participated in the four gram sabhas earlier had passed similar resolutions vehemently opposing any mining in Niyamgiri hills to extract bauxite ore for use in the alumina refinery of the Vedanta Alumina Limited.

The passing of similar anti-mining resolutions has created uncertainty over the proposed joint mining venture of the State government and Vedanta.

According to indications available from various quarters, the tribal people in the remaining seven villages were likely to strongly oppose the proposed bauxite mining project and pass similar resolutions. The sixth gram sabha is scheduled to be held at Batudi village in Rayagada district on July 27.

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Palberi adds another no to mining in Niyamgiri

Sayantan Bera, Down to Earth – http://www.downtoearth.org.in/content/palberi-adds-another-no-mining-niy...

26 July 2013

Attending Member of Parliament asks Odisha government to include 112 villages

The fifth palli sabha, taking a cue from previous ones, unanimously rejected proposed bauxite mining inside Niyamgiri hills. The village council meeting was held at Palberi village in Kalahandi district of Odisha. Fifteen of the 16 adult voters from the forest village were in attendance. All spoke against mining and asserted their religious and cultural rights over the entire Niyamgiris, spread across Rayagada and Kalahandi districts.

“Niyamgiri was not given to us by Central or state government. It belongs to Niyamraja (hill deity). Does not matter who made your laws; the law of Niyamraja runs here,” said Jilu Majhi, a Kutia Kondh tribal from the village. The Dongria Kondh and the Kutia Kondh tribals worship Niyamraja as their protector and provider, their supreme deity and ancestral kin, who presides over Niyamgiris, the mountain of law.

The village residents also rejected two community claims filed under the Forest Right Act and instead asserted their rights over the entire Niyamgiris. “We only buy salt and kerosone from outside. Everything else we need is here. My God is spread all over these hills. No one messes with him,” said an angry Gata Majhi, a woman in her seventies, pointing fingers at the dais.

Following up on the Supreme Court order of April 18, the Odisha state government selected 12 villages—seven from Rayagada and five from Kalahandi district—to take a call on the proposed bauxite mining in the Niyamgiri hill range and whether it will infringe on their religious and cultural rights. A joint venture of the Orissa Mining Corporation Limited (OMCL) and Sterlite Industries, the Indian arm of the London Stock Exchange-listed Vedanta, want to mine the hills for bauxite, to feed Vedanta’s alumina refinery on the foothills of Niyamgiri hills at Lanjigarh.

Despite objections from tribal and non-tribal forest dwellers of Niyamgiri hills and the Union ministry of Tribal Affairs, the state government of Odisha stuck to its list of 12 villages to hold palli sabha meetings between July 18 and August 19. “The Odisha government should hold palli sabha’s in all 112 villages spread across 240 sq km of Niyamgiri that is worshipped by the tribals,” contended Bhakta Charan Das, the local Member of Parliament from the Congress who attended the palli sabha meeting at Palberi.

Speaking to journalists later, Das asserted, “the state government has violated provisions of the Fifth Schedule of the Constitution by not taking the consent of all tribal villages on proposed mining. It has also tried to create a divide by proposing the hill top of Hundijali as the sole place of worship when the tribals worship the entire hill range.”

During the palli sabha, district judge Pramod Kumar Jena, appointed observer by the Supreme Court, intently listened to the speakers, scribbling notes. Sulochana Gouda, the panchayat ward member sat on the extreme left, looking diminutive, though she was the one presiding over the meeting. “With a Member of Parliament attending, the four pillars of democracy has come to this remote village,” quipped a journalist.

Sulochana Gouda, panchayat ward member presiding over the meeting, sat on the extreme left. She protested proposed mining in Niyamgiri. Third from left is district judge Pramod Kumar Jena. To his right is MP Bhakta Charan Das. On the extreme left is a doctor from the district hospital in case of any health emergencySulochana Gouda, panchayat ward member presiding over the meeting, sat on the extreme left. She protested proposed mining in Niyamgiri. Third from left is district judge Pramod Kumar Jena. To his right is MP Bhakta Charan Das. On the extreme left is a doctor from the district hospital in case of any health emergency

Next to the meeting venue, this correspondent spoke to the local block development officer (BDO), Prabir Nayak. “We have been trying to build roads for remote forest villages but the residents object. Getting contractors to execute project is also a challenge,” he said, in an obvious reference to the presence of Maoists in the area. Every palli sabha meeting in Niyamgiri is held under heavy security cordon of the Central paramilitary forces, state special operations group and the state police.

“We walk up the hills. We don’t have cars or bikes. What will we do with roads?” retorts Lado Sikaka, the feisty leader of Dongria Kondh tribals. Sikaka is not worried his name is chucked out from the voter list of Lakhpadar, the forest village he belongs to where the palli sabha will be held next month. “Doesn’t matter what their list says. I will speak. This place belongs to us.”

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A Glimmer of Hope

Economics & Politics weekly – Vol – XLVIII No. 31 – http://www.epw.in/editorials/glimmer-hope.html-2

3 August 2013

The environmental referendum in Niyamgiri should set an important precedent.

The final outcome of India’s first environmental referendum is not yet known but the very fact that it is taking place in the thickly forested and remote region of Niyamgiri in Odisha’s Kalahandi and Rayagada districts provides a small glimmer of hope. Despite logistical problems of reaching the 12 out of over 100 habitations in the area, gram sabhas or palli sabhas have been held. And the voters, the majority of them from the Gondhia Kondh and other tribes, are being asked to decide whether the bauxite mining project (BMP), a joint venture of the Odisha Mining Corporation (OMC) and Sterlite Industries, a subsidiary of the multinational Vedanta Aluminium, should be allowed to do open cast bauxite mining in the forested land covering these hills. At the time of writing, in what will surely be seen as a precedent setting move, four out of these 12 villages conducted palli sabhas as required under the Panchayat (Extension to the Scheduled Areas) Act or PESA, and all four voted unanimously to reject the mining operations.

What if all the 12 villages do vote against the project? Will this mark the end of a decade-long struggle against the Vedanta Aluminium Refinery at Lanjigarh, which began functioning in 2007 despite strong local opposition, and the proposed mining operations in Niyamgiri? Given the story so far, it is unlikely that the Odisha state government, which has worked overtime to ensure that the multimillion dollar investment of the Vedanta corporation is not wasted, will throw up its hands and withdraw in the event of a rejection. In fact, the Odisha government’s decision to hold the palli sabhas in only 12 villages instead of the 100-odd habitations in Niyamgiri has already given rise to doubts about its sincerity in conducting the exercise.

We must also remember that when the Union Ministry of Environment and Forests (MoEF) recognised that forest dwellers must have a say as mandated by the Scheduled Tribes and Other Traditional Forest Dwellers (Recognition of Forest Rights) Act, (FRA) 2006 and PESA, it did withdraw its earlier clearance to the mining project that will consume 660.75 ha of forested area. However, it did not insist on holding gram sabhas. And one can quote several other instances from around the country where it has failed to recognise the rights of forest dwellers.

In fact, the referendum is only happening because the Supreme Court, in its judgment of 18 April 2013, in a case filed by the OMC challenging the withdrawal of environmental clearance by the MoEF, concluded that final clearances could not be given without the concurrence of the forest dwellers. The Court wanted the tribal palli sabhas to “examine whether the proposed mining area Niyama Danger, 10 km away from the peak, would in any way affect the abode of Niyam-Raja”, which they consider as their deity. It ruled that if they concluded that this was so, “that right has to be preserved and protected”. Given this ruling, if all 12 palli sabhas conclude that the mining will affect what they believe is the abode of their deity, the result should be an unequivocal rejection of the mining project.

Regardless of the final outcome of the referendum, what is remarkable about the first four palli sabhas is the manner in which those voting articulated their opposition. These ostensibly unlettered tribal men and women were able to tell the district judge appointed to oversee the vote what the mountain and the forests meant to them. If anyone needed lessons in understanding how you live with the environment instead of following a path that destroys it, you just had to listen to these voices. The fact that these men and women were united in their opposition also illustrated not just the depth of their beliefs but that they had understood the importance of standing up for their rights even in a fight that appears unequal.

Can we expect this small but significant example of consultation to set a precedent across India? One would like to believe this but given the past record of governments, state and centre, there is reason for scepticism. The vote in Niyamgiri has happened not just because the law was on the side of tribal people but also because they had been organised over many years to articulate their opposition to these projects. In the absence of such an intervention, these tribal groups would probably have remained ignorant of their entitlements. Certainly, no government would have exerted itself to inform them about their rights. All over India, we are witnessing trenchant battles for control in regions like Niyamgiri that are repositories of natural wealth, both above and below the ground. Repeatedly, government and industry, working in tandem, have succeeded in riding roughshod over the objections of tribal people and ignored the rights guaranteed to them under the Constitution.

The battle for Niyamgiri has yielded several important lessons for the future. It highlights the fact that unless ordinary people are informed about their rights, even the most progressive laws fail to make a difference. It underlines the significance of organising the marginalised. And unfortunately, it also illustrates that even if such struggles are hard fought over decades, sometimes the odds are simply too great against people who have survived for generations without disturbing the earth. But if Niyamgiri survives, so will the hopes of the many who are engaged in similar struggles.