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Business News/ Opinion / Online-views/  Niyamgiri’s whiplash effect

What is it with Odisha and inviting trouble?

The four-term Biju Janata Dal government of Naveen Patnaik, with an unlovely record of human rights in general and especially with regard to business projects, may again have resurrected its greatest cause célèbre: mining bauxite reserves in the Niyamgiri Hills for eager claimants.

The shadow of conflict looms over these hills in Kalahandi district of Odisha. It isn’t only about the state-run Odisha Mining Corp. Ltd (OMCL) approaching the Supreme Court on 25 February to challenge the decision of 12 gram sabhas, or village councils, in the Niyamgiri area that overwhelmingly voted against bauxite mining back in July-August 2013. Or the fact that the government of Odisha had at the time categorically undertaken to abide by the decision of the gram sabhas that, among other things, kept the ore from OMCL and its majority partner, Sterlite Industries (India) Ltd, a Vedanta subsidiary, to feed a Vedanta-owned alumina refinery in the area.

The joint venture, South West Bauxite Mining Company (Pvt.) Ltd, with 26% equity holding with OMCL and the remainder with Sterlite, is now over. According to OMCL documents, the miner—“As per the directive of the Govt. of Odisha"—in September 2015 terminated the joint venture agreement to mine the “Bauxite in Lanjigarh bauxite deposit in Kalahandi & Rayagada districts & supply to the refinery of M/s Vedanta Aluminium Ltd. at Lanjigarh".

So, on the face of it, OMCL is now going it alone without any public taint accruing to Vedanta—which also claims to be scouting for bauxite reserves as a solo entity.

That is perhaps fortuitous, as on 27 February, two days after OMCL approached the Supreme Court, a teenaged tribal boy, Manda Kandraka, was shot dead by Odisha Police. The police termed it an encounter with a suspected Maoist rebel. Locals, especially the Dongria Kondh who consider Niyamgiri sacred, and remain the force behind the gram sabha voting and resolutions, claimed it was the cold-blooded killing of an innocent. In a media conference in the second week of March, protesters also claimed it was indicative of the Odisha government’s aggressive mindset. Beating and harassing of protesters that was once commonplace had now been replaced by killing—OMCL’s petition and a gratuitous police sweep could hardly be a coincidence, maintained the Niyamgiri Surkahya Samiti, which has for years led anti-mining protests. (The Odisha State Human Rights Commission has issued a notice to the police for a detailed report, but that has not exactly engendered waiting with bated breath for a humanitarian outcome.)

Here’s a cold-blooded business proposition, not emotion-soaked angst about potential loss of livelihood and life: For the government and aluminium producers, there is simply too much bauxite ore to pass up. According to a Vedanta presentation, Lanjigarh and a 60-km radius around it contains reserves of around 900 million tonnes of high-grade bauxite, or around 60% of Odisha’s recoverable reserves. As I have earlier written in this column, it is unlikely that a business is simply going to walk away from more than a billion dollars invested in an alumina refinery in Lanjigarh, and such deposits just a few hundred metres away. Vedanta even partially constructed a conveyer system from the refinery to the base of the Niyamgiri Hills (I took photographs of it as far back as April 2010) in anticipation of mining—its construction began several years before the gram sabhas nixed mining in 2013.

Vedanta’s public face, unlike that of OMCL, is now more lamb than wolf. From displaying belligerence over acquiring mining rights in Niyamgiri Hills as recently as in its 2012-13 annual report, the conglomerate in its 2013-14 annual report repeatedly stated its intention to take the community on board. “From our perspective," chairman Anil Agarwal was quoted in the report as saying, “we have made it clear that Vedanta will not source bauxite from Niyamgiri bauxite deposit without the consent of the local community."

Nevertheless, the subsequent Vedanta annual report offered hope. It mentioned that the expansion plans for the Lanjigarh alumina refinery had “reached final stages and environmental clearance is expected soon", and that three prospecting licences granted by Odisha’s government may soon yield fruit: “We expect to commence mining in the second half of FY2016."

This is clear distancing from OMCL’s ongoing judicial caper. But there remains a persistent query: If OMCL wins, which alumina refinery, up and running—and expanding—is closest to these hills? There is only one proximate answer: the Vedanta refinery.

Sudeep Chakravarti’s latest book is Clear.Hold.Build: Hard Lessons of Business and Human Rights in India. His previous books include Red Sun: Travels in Naxalite Country and Highway 39: Journeys Through a Fractured Land. This column, which focuses on conflict situations in South Asia that directly affect business, runs on Fridays.

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Updated: 18 Mar 2016, 01:41 AM IST
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