Getting rid of the Maoists could unlock $80 billion of investment in eastern and central India, according to a 2010 report by London-based securities house Execution Noble Ltd. Photo: Indranil Bhoumik/Mint  (Indranil Bhoumik/Mint)
Getting rid of the Maoists could unlock $80 billion of investment in eastern and central India, according to a 2010 report by London-based securities house Execution Noble Ltd. Photo: Indranil Bhoumik/Mint (Indranil Bhoumik/Mint)

Govt targets Maoist jungle stronghold to win mining riches

The govt’s approach to offer cash and amnesty to rebels who surrender, and ramping up a military counteroffensive to punish those who don’t, is working

New Delhi: The hills above Sinu Tati’s village of Tikanpal in central India are known for two things: one of the world’s largest iron-ore deposits, and a jungle full of Maoist guerrillas who attack anyone trying to mine it.

The district is a weather vane for a conflict that former prime minister Manmohan Singh called the greatest threat to India’s internal security, one that has killed more than 10,000 people in the past two decades and raged over one-third of the country.

It’s also key to current Prime Minister Narendra Modi’s plan to modernize India’s economy. To do that, he needs more minerals. And to dig the mines he needs to remove the rebels, who attack companies, police stations and mining equipment, wielding everything from bombs to bows and arrows.

Getting rid of the Maoists could unlock $80 billion of investment in eastern and central India, according to a 2010 report by London-based securities house Execution Noble Ltd. To this end, the government has adopted a carrot and stick approach—offering cash and amnesty to rebels who surrender, and ramping up a military counteroffensive to punish those who don’t. It seems to be working.

“The level of influence of Maoists is weakening," said Bhavin Vyas, political and security analyst at London-based Risk Advisory Group Plc, which counsels companies on global affairs. “That doesn’t mean the Maoist threat to companies has diminished significantly yet. They still face risks."

Green hunt

In 2009, the government began an operation known as Green Hunt, which stepped up the offensive by combining a nationwide coordinated military campaign with village-level economic development to win over the local population. The number of Maoists surrendering more than doubled last year and fewer civilians and security personnel died than in any year since 1998, when the government began making the data available.

The rebels—known in India as Naxalites after a rebellion in the village of Naxalbari in 1967—are scattered mostly up and down the mountain and forest villages of the eastern and southern half of the country. More than 90% of the India’s iron-ore deposits and 85% of its coal along with a host of other ores, gems and minerals are in areas affected by the insurgency.

One of the bloodiest is Chhattisgarh, a landlocked state the size of Greece that accounts for 38% of India’s tin, a quarter of its diamonds and almost a fifth of its iron ore reserves. Essar Steel Ltd and Tata Steel Ltd hope to invest $1.5 billion and $2.2 billion, respectively, to build steel plants in the Bastar range, a jungle region in the state that is a Maoist stronghold.

Village warzone

In the front line of this fight is Tikanpal, a village of 1,600 tribal people in the forest below the iron-rich Bailadila hills, eight hours’ drive from the nearest city of Raipur, the state capital.

For the past decade, Tikanpal was considered unsafe to enter without a military escort. Now, it is slowly opening up to the outside world. Children who once remained at home walk to school along the winding mud roads. Locals get clean water from tanks filled by solar-powered pumps. Government vehicles arrive unescorted, bringing food for the poor and materials for roads and schools.

“After a long struggle, we are mustering the courage to stand up," Tati, 45, said in November, sitting in his mud-walled hut with clay roof tiles. “A small ray of hope has emerged."

It wasn’t this way last May, when Tati and a dozen other villagers were rounded up by the rebels and marched at gunpoint through the mosquito-ridden forest in temperatures exceeding 38 degrees Celsius to a jungle camp.

Night torture

The guerillas took turns torturing them through the night for ignoring their instructions or refusing to give money, Tati said, lifting his shirt to show a scar that snakes up from his lower back to his left shoulder blade. In the morning, the Maoists released them, and they returned to the village carrying the body of one of the captives, who had been beaten to death.

“The government’s decision to offer incentives to rebels to lay down their arms has made a big difference," said S.R.P. Kalluri, inspector general of police of the Bastar range.

The government’s charm offensive includes counselling for Maoist family members and campaigning through dance and drama productions at the weekly village markets. It also has a surrender policy that offers a job and as much as 1 crore for a senior rebel, said Kalluri.

‘Bloodless solution’

“For the first time we have given them a bloodless solution to a bloody problem: Come to us, we will give protection, you won’t go to jail; take land, money and job," said Kalluri, who says he receives regular death threats. “It’s working wonderfully."

In August, the police caught a rebel leader in Tikanpal called Kosa, 30, who was accused of being involved in an attack in February 2014 that killed five security personnel. A month later, Tati helped convince 13 villagers who had joined the rebels to surrender, including some who helped beat him.

“If the government brings in more development, creates infrastructure and continues to win the hearts of locals, then in the next five years we can hope to see an end to Maoist activities," said Rahul K. Bhonsle, director of Security Risks Asia in New Delhi who spent three decades in the army and has written books about India’s internal security threats.

Modi last month said he’d transfer a record amount of money to state governments in a bid to spur local development. He also introduced legislation that would give states the proceeds from mine auctions for the first time, a move that would benefit areas where Maoists pose a threat.

Buried trucks

Fifteen kilometers up a winding track from Tikanpal is one of the government’s biggest incentives to achieve its goal. Here, in the heart of Maoist territory, state-owned mining company NMDC Ltd has been battling to extract iron ore since 1968.

Officers of the Central Industrial Security Forces, armed with rifles provide security at drilling and crushing areas and guard conveyor belts stretching 14.5km that transport pulverized rock to rail cars. Maoists have attacked the plants, buried trucks, set fire to the conveyor belts and shot guards.

They have also tried to blow up the 267km pipelines, the second-longest in the world, that transport ore as a slurry to Essar Steel’s plant in Visakhapatnam.

Security nightmare

The mining area is a security nightmare. The ore deposits are spread along the top of a mountain range, with service roads and supply routes running through the jungle. Employees and managers at the site have been told not to talk to outsiders about the Maoist activities, but some said privately that this was a hardship posting and they still feared attacks from the surrounding jungle.

Of 14 known iron deposits, only two are being exploited. NMDC received clearance to start digging another mine in October.

It’s becoming imperative for Modi’s government to get at the rest of the ore. Only three years ago, India was the world’s third-biggest iron-ore exporter. But booming domestic demand for steel, coupled with higher taxes on exporters and the suspension of mines in Goa and Karnataka states, have caused exports to slump.

This year, India may become a net importer of the steelmaking material, according to Bloomberg Intelligence analysts Zhuo Zhang and Kenneth Hoffman. They predict the country may need to import as much as 45 million tonnes of the ore over the next three years. JSW Steel Ltd and Tata, India’s largest steel makers, expect to import 11 million tonnes this year.

High-grade ore

The Bailadila hills could reverse that. Their rock is high grade, containing about two thirds iron—compared with about half in Goa—and it’s relatively free of minerals like sulfur that makes the ore harder to turn into steel.

There’s an estimated 1.3 billion tonnes of iron ore here, enough to supply the US for a quarter of a century.

Essar Steel said in an e-mail that it faces challenges in Kirandul, where it has an ore processing plant near the mine, but is able to overcome the problems thanks to its support of local communities. NMDC declined to comment on the Maoist attacks.

Company and government efforts to win over local villagers are eroding support for the rebellion among the tribal groups and poorest castes that were its main recruiting base. What began as a classic communist uprising of poor peasants against landowners has become distorted as government campaigns to crush the early movements pushed the rebels deeper into military conflict.

‘Losing ground’

Police stations, trains and even schools became targets, and the Maoists turned to kidnapping and extortion to fund the rebellion. Rebel groups collect about 140 crore annually nationwide through extortion, the government said in December.

“Recruitment to their brigades has been declining and tribal communities’ support is also waning," said Sanjay Potam, known as Badru, a former rebel leader. “They are losing ground."

Badru said he was about 18 when he joined the rebellion, after the government-backed militia, Salwa Judum, burned his village. Along with Mao’s ideology, he learned how to fire automatic weapons, make bombs, lay landmines and toss grenades.

Over eight years he rose through the ranks, overseeing a force of 140 and recruiting new members from villages in Chhattisgarh, protected by his personal bodyguards. He was wanted by authorities for the 2009 murder of an alleged police informer and for an attack in 2012 that killed two security personnel.


“I realized that we were spending day and night in the jungle in a misguided belief that we would change society," he said in an interview in November in the mining town of Dantewada. “Nothing will happen. I would also die one day like my colleagues."

In the autumn of 2013, with a bounty of 3 lakh on his head, he turned himself in. Others have followed, most recently eight Maoists in the South Bastar region who surrendered to police on Sunday, Press Trust of India reported.

Amnesty and cash payments won’t be enough to end the conflict alone though. The government has stepped up its military campaign with better equipped and trained security forces, and improved coordination between federal and state units, according to Madhukar Gupta, a former federal home secretary.

About 40,000 commandos armed with helicopters, drones, GPS trackers and satellite phones have stepped up the offensive in the Bastar region, said Kalluri, the inspector-general in Jagdalpur, showing maps and describing the operation in his office.

Recent attacks

Still, the guerrillas continue to hold out. After months of calm, Maoists in December killed 14 Central Reserve Police Force (CRPF) personnel in an ambush in Bastar.

The reports of increasing surrenders are “fake and engineered," Ganesh Uike, secretary of the South Regional Committee of the Communist Party of India (Maoist), said in a statement in December to local media.

An “unprecedented expansion" by the Maoists after 2004 to areas outside of their traditional control weakened the organization, said Ajai Sahni, executive director of the Institute for Conflict Management in New Delhi. Even so, a depleted threat is still a disincentive to investment.

“They still have the capacity to engineer major strikes," Sahni said. “They will strike big to show their strength when they will have an opportunity."

Nepal victory

They may also take some encouragement from India’s neighbour Nepal, where the Unified Communist Party of Nepal (Maoist) fought a decade-long civil war to topple the monarchy. Following a 2006 peace accord, the Maoists won power in 2008 elections.

In India, there’s little sign of such support, with villagers suffering the brunt of the fighting from both sides. For a decade the people of Tikanpal had to pay extortion money to the rebels, including 5% of the money to build a school, according to Tati and other villagers. The rebels prevented a mobile phone tower being built and destroyed their water tank.

“Tikanpal used to be a very dangerous place and it was difficult for police to go there," said Kamlochan Kashyap, a local police superintendent.

Today, the villagers can take some comfort in the presence of a paramilitary compound just 5km down the road, with 135 security personnel.

“The camp gives us some courage to face the Naxalites," said Tati. “Still we always live in fear. Let’s pray someone’s evil eye does not fall again on our village." Bloomberg