SAIL steel plant
Even as POSCO’s ambitious SEZ plan proceeds in Orissa amidst brutal repression of local protest, its public sector rival SAIL has decided to set up a SEZ at its existing stainless steel facility in Salem. An expansion of the existing plant has been sanctioned, with Congress MPs promising “employment in the plant” for displaced families. Moreover, SAIL has joined the race for securing mining rights in the nearby Kanjamalai hills, which has already been eyed by the Jindals.
2. Private mining companies in Salem:
Iron is being mined in Kanjamalai by the Jindals through a joint venture company floated by Tamil Nadu Industrial Minerals Corporation Ltd TIMCO, Bauxite is being mined illegally in the Kolli hills (Shola forests) and legally in Shervarayon Range by the Vedanta subsidiary MALCO, Magnesite is being mined by Dalmiya, Burn&Co, Tanmag, etc.
Just for the Jindal project, 638 acres is sought at Kanchamalai, a place rich in indigenous herbs, and 330 acres has been asked for at Tiruvannamalai District (Vediappanmalai/Kauthimalai). Around 90,000 trees at Kanchamalai and 200,000 trees in Tiruvannamalai District will be felled if the project is cleared by the Forest Department. Indicating that the Forest department has given its green signal for the project (which it rejected earlier), officials said, “Things are no more in our hands but with the Supreme Court, which sent a Committee on May 29th 2008 to Kanchamalai to make a report.”
3. IT SEZ in the Salem area:
ELCOT, the official executor of IT projects in Tamil Nadu, has received expressions of intent from six firms to open shop in Salem. The Tamil Nadu Water and Drainage Board will provide 7.5 mld of water to the park. The charges for an acre come to Rs. 17.5 lakh. The lease period is 90 years. Since the zone will be 100 per cent export-oriented, facilities including uninterrupted power supply and water will be provided. An extent of about 14.44 acres has been identified to set up an exclusive 230 kv sub-station. The job is entrusted with the Tamil Nadu Electricity Board.
(3a) Update on IT SEZ
After the State-sponsored projects of IT Park and Special Economic Zone (SEZ), for which foundation stones have been laid just a week ago, the other major project that will come up here soon is the Steel Authority of India Limited (SAIL) SEZ.
A memorandum of understanding (MoU) between SAIL and Infrastructure Leasing and Financial Services Limited (IL&FS), an investment banking institution, has been signed for the formation of a special purpose vehicle (SPV) to develop, operate and maintain this exclusive Steel Sector SEZ, which is to be established adjacent to the Salem Steel Plant (SSP) here.
A. K. Jain, Executive Director (Corporate Planning), SAIL and D.K. Mittal, Chairman & Managing Director, IL and FS signed the MoU documents on September 15 in New Delhi.
The Industrial Infrastructure Development Corporation (IIDC), a wholly-owned subsidiary of IL&FS, will hold equity shares in equal proportion in the SPV, which will be formed within a month to initiate the process for the SEZ development.
The application for approval would be submitted to the Central Government. The proposal will be placed before the Board of Approvals of the Ministry of Commerce too in October for final clearance.
Role of anchor
SAIL, which provides its land, however, will play the role of an anchor by providing customised steel products to prospective units that come up in the SEZ which could be set up to manufacture architectural facades, railway applications, dairy plants, chemical and pharmaceutical plants, machines for the food processing industry, tubes and pipes, auto components, panels for lifts, and so on.
SAIL will also gain from the proposed venture in the form of assured demand for SSP’s stainless steel production, which is going to increase significantly after its expansion. In addition, SAIL would receive the benefits such as land lease rentals, tax concessions and other earnings.
IIDC, which specialises in providing the integrated and comprehensive professional services towards the development of infrastructure projects, from the stage of conceptualisation to implementation, will provide advisory and other related services.
In the meanwhile, the Tamil Nadu Pollution Control Board will conduct a public hearing on the proposed Rs. 1,200-crore expansion of the Steel Plant on Wednesday.
The run for the resource-rich Kanjamalai, a hill located near Salem, has acquired a new dimension with Union Steel Minister Ram Vilas Paswan appealing to the Tamil Nadu Government to allocate the iron ore mines in the hills to the public sector Steel Authority of India Limited (SAIL).
Mr. Paswan, participating at the foundation stone laying ceremony for the Salem Steel Plant’s (SSP) modernisation and expansion project recently, said “the mines at the hills are at the core of the current expansion plan of Salem Steel”.
The project, once completed, will make the SSP an integrated steel plant, enabling it to produce high quality stainless steel. If the plant is able to source iron ore locally, it will benefit the SSP in many ways. The supply of iron ore from Kanjamalai is a key to the growth of the SSP, industry sources here point out.
The Tamil Nadu Iron Ore Mining Company (TIMCO), a joint venture between Jindal Vijayanagar Steels and the Tamil Nadu Industrial Development Corporation (TIDCO), which is already in the race for the iron ore at the hill, has planned to invest about Rs. 400 crore to take up mining in Kanjamalai, where an area of over 635 acres has been earmarked with a potential for about 75 million tonnes of iron ore. TIMCO will supply the iron ore to JSW Steel’s Salem facility.
But people and the industrial community here insist that the public sector SSP, which is on an expansion mode, should also be given the opportunity to mine iron ore from the hill.
With the fresh request from Mr. Paswan, the demand has gained more support. SAIL also planned a Special Economic Zone exclusively for steel at the SSP premises.
Meanwhile, people in the villages, in and around the hill, are strongly opposing any mining activity in the Kanjamalai reserve forests, as it, they claim, will affect their livelihood and the environment.
The Prime Minister, Dr. Manmohan Singh on Friday laid the foundation stone of the expansion project of the Salem Steel Plant in Tamil Nadu today.
Speaking on the occasion, he said this project is designed to produce high quality stainless steel that will be used both for home appliances and for industrial usage.
The present expansion project for the installation of steel melting facilities along with other facilities will help make the Salem plant a truly integrated steel plant, he said.
He further said that these investments will create new opportunities for growth of employment for the young people of Salem and the surrounding areas.
Speaking high on Indian steel sector, the economist said, “the rising prominence of our steel industry on the world’s steel landscape also mirrors the emergence of our country as a leading economic power in the world. From small beginning, India has now become the fifth largest producer of steel in the world. If present trends continue we will become the second largest producer in the world by the year 2015.”
“A lot of hard work and enterprise is needed for us to meet our rising steel demand and catch up with other industrial giants in the world. Our steel companies have to operate on the frontiers of technology, managerial excellence and high productivity. “ he said.
Thirty eight years ago, in September 1970, the foundation stone of this plant was laid by then Prime Minister Indira Gandhi.
Tamil Nadu Congress Committee president K.V. Thankgabalu, MP, has assured that the kith and kin of those who gave their lands for the establishment of Salem Steel Plant will be provided employment in the plant.
Addressing the members of the agitating families who gave their lands for the plant here on Sunday, he said that the issue was already taken to the notice of Steel Minister Ram Vilas Pawan and the Government of India.
He promised the agitators that steps would be initiated soon to provide employment to eligible persons in the plant.
The agitating members, however, refused to withdraw their protest.
The families are demanding job opportunities under skilled and unskilled categories in the plant, which is implementing an expansion project now.
Vedanta Undermines Indian Communities: Corpwatch 2005 report
A tribal temple on Shervaroyan Peak in the hills of Yercaud in Southern India recently developed several large cracks. Built several centuries ago, the temple has withstood colonization and independence. But of late, a new mine threatens to destroy this historic site. Vedanta, a fast-growing British company, owns a subsidiary – Madras Aluminium Company Limited (MALCO) – that has been strip mining this and nearby peaks for bauxite, the ore that yields aluminium used in products from throwaway soda cans to aircraft bodies.
From where he stands, K. Babu can see the deep red gashes ripped into the hillside barely 100 metres from the temple. He and other community activists charge that MALCO is a heavy weight player in the local economy and politics, and a significant contributor to environmental degradation. “There’s a limit to exploitation. Nothing is sacred any more,” says the president of the local youth federation. “Their only botheration is to excavate more and more. Maintaining ecology is not at all an issue.”
MALCO’s operations in the southern Indian state of Tamilnadu span more than 60 kilometres– from the mist-clad Yercaud and Kolli hills to the impressive earthen dam and reservoir on the Kaveri River in Mettur. On the banks of the huge reservoir, MALCO operates a smelter and a refinery complex where locally mined bauxite is converted into aluminium. A mountain of toxic red mud – a by-product of aluminum production – is separated from the reservoir by a flimsy embankment.
MALCO is a small cog in the giant wheel that is Vedanta Resources, a company set up by British billionaire businessman Anil Agarwal. Born in eastern India, he started out as a scrap metal merchant in Mumbai, before moving to London 30 years ago. Agarwal’s fortunes soared as the small Indian company he set up in 1988 rode the telecom boom, supplying copper cables to telecom companies in India.
Today, Vedanta is a vertically- integrated behemoth with an impressive international portfolio comprising copper, bauxite (aluminium), zinc, lead and gold. It has raised almost $1 billion on the London Stock Exchange and has started to snap up mines in Zambia and Australia.
In India, which remains its production base, the company runs a giant copper smelter in the coastal town of Tuticorin in the southern state of Tamil Nadu, and aluminium smelters in the central and east Indian states of Chattisgarh and Orissa. According to the company’s annual report, it plans to start a massive captive mine in the Niyamagiri hills of Orissa, a smelter in nearby Lanjigarh, and a refinery also in Orissa.
According to activists, the projects threaten densely forested areas that are home to tiger, Indian bison, bear, and elephant. The affected human population includes impoverished tribal communities, some of whom charge that Vedanta’s projects are illegal, and that the state and central governments are colluding with the company to circumvent environmental protections.
“Nobody wants to take on Sterlite. They have built entire plants within their copper complex [in Tuticorin] with no permission from any of the authorities and without fear of reprisal,” says Fatima Babu, a women’s activist and fisher leader from Tuticorin. “The government machinery has not just tolerated Sterlite’s violations but facilitated it.”
Faced with community opposition, Sterlite has set up a foundation to address local needs and sited seven of its 18 centers in Tuticorin, Sterlite Copper’s hometown . “We don’t do anything extraordinary,” S. Chaamundi, country head of the foundation’s child welfare program told India’s Financial Express. “But the glow in the eyes of the children when they feel that they have someone to bother about them, the shine in the face of the poor parents when they report their child also say ’sorry’ and ‘thank you,’ like the children in the homes they work as housemaids or coolies, make us feel we are doing something worthwhile.”
Telling Tales from Tuticorin
These social welfare programs have done little to blunt a long history of opposition to Vedanta or to counter evidence that it has polluted the environment, poisoned locals, and colluded with officials to bypass environmental protections.
In less than 8 years, 139 people have been injured and 13 killed by accidents or pollution from the Tuticorin smelter complex, according to documented reports and testimony from workers. [See box on “Occupational Injuries and Deaths at Sterlite”]
Complaints about the company began mounting in the mid-1990s, when protesters in Ratnagiri in the western state of Maharashtra cited environmental concerns to block Sterlite from building a smelter and to force the state to revoke the company’s license. Shortly after, a Tamil Nadu government invitation to Sterlite to build a plant in Tuticorin sparked massive protests by residents — particularly fisherfolk.
But the Tamil Nadu project had the blessing of Chief Minister J. Jayalalithaa Jayaram, who laid the foundation stone for the complex. Less than four months after applying to build the smelter, Tamilnadu Pollution Control Board (TNPCB) granted conditional licenses to construct a 140,000 ton-a-year copper smelter and associated plants.
That license stipulated that the unit be at least 25 kilometres from the Gulf of Mannar Marine National Park in order to protect the region’s ecology – its famed coral islands and exotic species such as dugongs, sea turtles, and pearl oysters — from sulphur dioxide, arsenic and lead emissions.
In 1995, ignoring the TNPCB’s instructions, Sterlite erected the smelter complex– including a mothballed smelter scavenged from the U.S.– 16 kilometres from one of the protected islands. Rather than act on the violation, the pollution board granted the company an operating license to manufacture up to 40,000 tons of blister copper.
In 1996, local resistance came to a head when fisherfolk used an armada of small boats to prevent ships carrying Sterlite’s raw material – copper concentrate – from entering the Tuticorin harbour. But resistance waned after the government conceded to one of the protesters’ demands: to prohibit disposing the effluents at sea.
Within two years a spate of accidents and gas leaks from the factory spurred the Madras High Court to commission a report on pollution by Sterlite. NEERI – a national environmental engineering laboratory – faulted the company for discharging dangerous levels of pollution into the environment and recommended the company’s closure. Barely three months later, the same court reversed itself, cleared Sterlite, and recommended its reopening.
Then, weeks after the facility re-opened, nine employees of a neighbouring radio station who were hospitalized, blamed a gas leak at the factory.
By September 2004, when a Monitoring Committee (SCMC) empowered by the Supreme Court visited Sterlite, the plant was churning out four times the allowed levels of pollutants, according to the Vedanta’s Annual Report 2004.
In the face of this record, some environmental and human rights activists are confident that local resistance will gain strength. “The [anti-Sterlite] campaign is bound to pick up because of [Agarwal’s] arrogant expansionism,” says T.S.S. Mani of Human Rights Tamilnadu Initiative, a Chennai-based voluntary organisation.
Other activists remain sceptical.
“I don’t know how we are going to succeed given the level of [government] collusion,” Fatima Babu says. “Even now, they are going ahead with illegal expansions and business as usual.”
That cynicism is fueled by the fact that all the new construction in Tuticorin has occured without the environmental clearances legally required by both the central and state governments,
and that other illegal construction at the Orissa site continues. At the time of the Supreme Court monitoring committee’s 2004 visit to Tuticorin, Sterlite had nearly completed construction of a 300,000 ton-per-year copper smelter, a 127,000 ton copper refinery, a power plant, and several other units. None had government approval.
Nonetheless, barely a day after the committee’s visit, the central government gave post-facto clearance to the already constructed plants – despite the fact that Sterlite had never gotten the pollution board’s consent to built them. The board approval came in April 2005 when the factory was ready for production. According to a July 2005 Supreme Court Committee report the TNPCB claimed that it consented afterthe Central Ministry ordering it to do so.
Senior TNPCB officials declined to comment. “I’ll get into trouble if I speak to you. Please don’t ask me anything,” said R. Ramachandran, member secretary (acting) of the board. A faxed letter seeking clarification on the reasons for TNPCB’s failure to force compliance, elicited a cryptic response from Surjeet K. Choudhary, secretary to the Tamilnadu government and temporary board chairman. “Board is taking necessary action,” he wrote.
Phone calls and emails to Secretary to the Union Environment Ministry Prodipto Ghosh and to public relations chief Maria Doss went unanswered.
Deforestation and Evictions
The controversies have apparently not affected the company’s bottom line. The man behind Vedanta/Sterlite, Anil Agarwal, reported that attributable profits for year ending in March 2005 were up 66 percent to $120 million.”This has been an exceptional period for metal prices driven by strong demand from China,” as well as for “increased foreign investment and the potential [for India] to become a major regional manufacturing hub,” he said in Vedanta’s annual report. Agarwal acknowledged that the company had benefitted from the political climate. The Congress Party, elected in May 2004, “has maintained a policy of growth and liberalization” favorable to his company, he reported.
That growth is in no small part a consequence of Agarwal’s ability to work the system. India’s commerce minister P. Chidambaram was on the Vedanta board until his party assumed power in New Delhi last year. His replacement, 70-year old Naresh Chandra, is a former cabinet secretary and senior advisor to the prime minister of India from 1992 to 1995, and Indian ambassador to the US from 1996 to 2001.
A cartoon in Business India depicts the Vedanta/Sterlite founder squeezing himself through an hour-glass saying “In India, you must have patience. Everything will come through.” Many concede that the London-based billionaire’s understanding of India’s decision-makers is frighteningly accurate.
Ritwick Dutta, a Supreme Court lawyer who has brought Vedanta’s violations in Orissa to court, says that the company adopts a time-tested strategy: “They don’t go for small violations. They go in for massive violations, bring it to light and then get post-facto clearance after payment of an insignificant fine. In Orissa, they chopped down trees on 58 hectares, and gladly paid the fine of Rs. 30,000 or so ($650). Now, they have gone ahead and clear-felled another 1,000 hectares of forests in Chattisgarh.”
On September 21, another Supreme Court monitoring committee, this time the Central Empowered Committee (CEC) on Forests, recommended revoking Vedanta Alumina Ltd’s environmental clearance for a 1 million ton aluminium refinery in Lanjigarh, Orissa. The CEC found that Vedanta had falsified information, destroyed 58 hectares of forest land and begun construction without the required clearances.
“The refinery’s viability is dependent on mining the nearby Niyamagiri hills which are in a reserve forest. But the company failed to disclose this while seeking permission for the refinery,” says Dutta. “Their strategy is to quickly invest money and build the refinery and then plead with the authorities that their investment – nearly Rs. 3500 crores ($780 million) would be rendered unviable if the mine is not cleared.” The Lanjigarh plant is nearing completion, while the mining proposal has yet to secure approval.
Company head Agarwal brushed aside these concerns in his annual report. “There have been some public interest submissions to a Supreme Court of India sub-committee, regarding the environmental clearances for the bauxite mining and these are currently being addressed.
Some activists suspect that the ways the company is addressing the problem is not to ameliorate damage, but to work its special relationship with government officials. According to Dutta and the CEC, the situation at Orissa throws the integrity of the authorities in question.
Indeed, the CEC hints at complicity between the company, the Union Ministry of Environment and the Orissa government. In its report, the committee writes: “The casual approach, the lackadaisical manner and the haste with which the entire issue of forests and environmental clearance for the alumina refinery project has been dealt with smacks of undue favour/leniency and does not inspire confidence with regard to the willingness and resolve of both the State Government and the MoEF to deal with such matters keeping in view the ultimate goal of national and public interest.”
Besides the clear cutting, there is the issue of “demolition of tribal villages on the land that Sterlite wanted to occupy,” says Dutta. In 2004, two tribal villages were razed, and the residents were forcibly relocated to resettlement camps. Since then, two more villages have been evicted with help from the state police and company-sponsored goons, according to tribal rights activist Prafulla Samantara.
As of November 10, armed police stationed around Lanjigarh were preventing tribals and activists from congregating at the plant gate to protest the Vedanta project’s illegal construction, said Samantara. Police have detained several tribal leaders and their supporters, he said, and a cordon around the village was keeping him from protest site.
The non-profit People’s Union of Civil Liberties investigated the human rights violations reported by Lanjigarh residents and concluded: “It is hard to believe that [the area] is a part of the same India that the elite continuously brags about having catapulted into twenty-first century. …The people are terrorised, and believe (perhaps rightly) that their attackers enjoy the support of the police. This apprehension of the people is reinforced by the fact that the attackers admit in public that they have attacked the agitating villages.”
SALEM, Aug 28 2008: Villagers living at the foothills of Kanjamalai, led by a group of activists from the `Save Kanjamalai Campaign,’ laid siege to the District Collectorate for nearly three hours here on Wednesday urging the district administration to provide them detailed information concerning mining in the hill.
The villagers said that despite their protest, the Government had sanctioned permission for private steel company to mine iron ore in the hill, which they should would not only degrade the environment in and around the hill but also affect the livelihood of hundreds of villagers in the neighbourhood of the hill.
Despite the police intervention villagers insisted that officials should hold talks with them.
The District Revenue Officer M. Rajarathinam and other senior officials pacified the protestors.
They also assured them necessary information would be provided to them as per the guidelines.
The villagers said that they would not permit any mining in Kanjamalai and the Government should immediately withdraw its permission on mining.
Meanwhile cadres from Democratic Youth Federation of India (DYFI) took out a protest rally in the city condemning the Government’s move to allow iron ore mining in Kanjamalai by a private steel major.
District president M. Gunasekaran and others took part in the rally, which began at Sevvapet Fire Station and ended at the Old Collectorat building where a demsontration also was held.
This report appeared in The Hindu
Over 500 villagers from about 50 villages in and around Kanjamalai, opposed to the proposed iron ore mining in vast tracts of reserve forest land in their area, today resorted to a novel protest by invoking the Right to Information Act asking the Tamil Nadu government to come clean with details of the project.
The villagers from in and around Kanjamalai in the district caught the officials by surprise by barging enmasse into the District Forest office here to present their petitions under the RTI Act, seeking details such as who gave the lease order and how such a project can be permitted in reserve forest land.
The state-owned Tamil Nadu Industrial Development Corporation and SISCOL have formed a joint venture for taking up mining in about 630 acres in Kanjamalai and according to reports the State government was awaiting clearance from Union environment and Forest Ministry and Department of Mines.
The villagers contended that mining in the area would lead to ecological problems and affect their livelihood, District Forest Officer V P Kandaswamy told Agencies.
Even the ground-levelling work has not begun at the site proposed for the Information Technology-specific Special Economic Zone here, creating doubts among citizens about the status of the ambitious project. A senior ELCOT official, however, said work would begin soon.
The magnesite-rich area spread over almost 66 hectares includes 31.37 hectares for which Burn Standard Company, a public sector undertaking engaged in open-cast mining, has been seeking an extension of lease by another 20 years. The State has, however, turned down the request: the lease expired in June 2001.
Chief Minister M. Karunanidhi laid the foundation stone for the zone a year ago.
With the land remaining unused for long, illegal miners are having a field day.
Situated on Salem-Bangalore National Highway and located at a distance of four hours by road from Bangalore, the site is seen as an ideal location for IT firms.
ELCOT, the official executor of IT projects in Tamil Nadu, has received expressions of intent from six firms to open shop in Salem. Of these Zenith Software Limited, Bangalore, has been allotted eight acres. Others, including dB Professional, Chennai; Mahima Technologies; VS Computers, Salem; SS Technologies and Maruthi Computers have reserved sites that range from three acres to six acres.
The charges for an acre come to Rs. 17.5 lakh. The lease period is 90 years. Since the zone will be 100 per cent export-oriented, facilities including uninterrupted power supply and water will be provided. An extent of about 14.44 acres has been identified to set up an exclusive 230 kv sub-station. The job is entrusted with the Tamil Nadu Electricity Board.
The Tamil Nadu Water and Drainage Board will provide 7.5 mld of water to the park. BSNL, Tata VSNL, Bharati and Reliance have already established their broadband networks here.
Tier-II cities in the State such as Madurai, Coimbatore, Tirunelveli, Tiruchi and Hosur, which have been allotted government-sponsored and private IT parks, have started receiving expressions of intent.
Eight firms have decided to set up shop in Tirunelveli. Eight others have expressed their intent to launch projects in Madurai. Coimbatore will have five projects and Tiruchi will have three.