By Rahul Goswami

Kalinganagar in Orissa is only the latest in a series of bloody confrontations between the state and the people over India's minerals industry. What are the imperatives of the international iron and steelmaking industry, and the attendant mineral extraction, that engender such a ruthless response by the state, and its complicity in ensuring that the interests of industry remain paramount? A special report

The police firing on protesting tribals at the Kalinganagar Industrial Complex in Duburi, Orissa, on January 2, 2006, is the latest, and undoubtedly the bloodiest, confrontation between the people and the state over India's minerals and metals industry. As states like Orissa, Jharkhand, Chhattisgarh and Bihar court foreign direct investment while bemoaning their low human and social development indices, they have found that the processes of globalisation and their states' mineral wealth are complementary.

But not to the most marginalised of their populations, not even to those who have the strongest claims to the land via traditional livelihoods. The extractive industry has always been predicated on destruction -- controlled and with an element of mitigation, but it is destruction nonetheless. In India, as elsewhere in the world where such industries and indigenous communities have struggled for use of natural resources, the relationship between mining companies and the people has been characterised by the fact that the local communities are seldom consulted, their needs and concerns are only marginally satisfied and they are rarely involved in the decision-making processes.

Kalinganagar of January 2 is the newest battle between the people and an increasingly disembodied state, one which exerts a malevolent will through the apparatus of law-and-order, and which operates in concert with the most inhuman logic of globalisation. That act of sanctioned murder -- for it is nothing less -- is an assault on our democracy, our Constitution, our paradigms of human and community development and our shared identities.

The struggle has been a long and bloody one, with the state and industry refreshed, in the last decade, by the growing homage to models of globalisation and the power of capricious global capital. The result has been a relationship between state and people in which confrontations, tensions and conflict have been predominant. In India, campaigns by people's organisations and social action groups against unjust and inequitable mining have emerged as a facet of the struggles of the local communities for people's rights over natural resources. Issues brought out have included displacement, human rights violations, environmental degradation and health hazards.

Nevertheless, the livelihood systems of adivasi communities and the rural poor are increasingly being snatched away by integrated mining operations in Bihar, Madhya Pradesh, Orissa (See table), Goa, Maharashtra, Andhra Pradesh and other states. Those critical of the methods of the metals and minerals industry, and ipso facto of the state's support to such industry, are also critical of the role of World Bank policies in the extractive industries, the Bank's involvement in India's coal sector being emblematic of the problem. The World Bank provides technical assistance to member countries on such matters as the legal framework for the industry, geographical information systems, environmental regulation and modernisation techniques for mineral extraction and processing even while it suggests ways to mitigate the socio-economic and cultural impacts of mining. Yet it is the major World Bank-funded mining projects that suffer chronically from socio-economic problems.

The Kalinganagar killings have exposed most dreadfully the impacts on India's aboriginal communities of escalating 'development' aggression by mining companies and governments, both state and central, the criminal disregard of tribal peoples' rights deriving from this minerals rush. From the late-1990s -- when Rayagada in Orissa was simmering with opposition to bauxite mining and the alumina industry, and which reached a similarly bloody conclusion in 2000 with police firing, deaths and crippling injuries to many -- the landscape of the struggle has been thrown into sharper relief by the insensate rush towards mineral exploitation.

Sooner rather than later there was bound to be another deadly confrontation between the custodians of land and the authorities, the proxies for national and multinational mineral capital. It was very likely to occur in Orissa, but could also have struck communities fighting for their resources, or adequate compensation, in the nearby states of Jharkhand, Chhattisgarh and Andhra Pradesh.

Yet the corporate world that directs mineral extraction has proceeded with impunity. Only a month earlier, Vedanta Resources Plc, a Britain-based company, announced plans for a plant that will smelt alumina (an investment of US$2.1 billion) in Orissa's Lanjigarh district. Vedanta is speeding to complete its factory works, in violation of demands that it desist made last September by a Supreme Court committee and by local communities. Watching the outcome of the two-year battle waged by Khond Adivasis and their supporters are the most powerful contenders for Orissa's mineral spoils -- BHP Billiton, Rio Tinto, Alcan, Mittal and Posco: respectively the world's two biggest mining conglomerates, the second biggest integrated aluminium producer, and the world's second and fifth biggest (by production) steel firms.

Kalinganagar, Rayagada, Dalli-Rajhara all have the same thread running through them. Dalli-Rajhara, an iron ore-mining town, meets the total iron ore requirements of the Bhilai Steel Plant and was an early indicator of the shape of struggles to come. In the ’70s it was mechanisation at Rajhara that was the issue. When almost overnight at deposit Number 5 in the Bailadila mines, almost 10,000 labourers were rendered jobless, opposition flared up. The response was swift and brutal -- all resistance was crushed, hundreds of labourers' huts were burnt down, numerous women were raped, and labourers were fired upon.

What are the imperatives of the international iron and steelmaking industry, and the attendant mineral extraction, that engender such a ruthless response by the state, and its complicity in ensuring that the interests of industry remain paramount? Here is a brief outline:

* The metallurgical and mineral industries constitute the bedrock of industrial development as they provide the basic raw materials for most industries. India produces as many as 84 minerals comprising four fuel, 11 metallic, 49 non-metallic industrial and 20 minor minerals. Their aggregate production in 1999-2000 was about 550 million tonnes, contributed by over 3,100 mines (reporting mines) producing coal, lignite, limestone, iron ore, bauxite, copper, lead, zinc and other minerals. More than 80% of the mineral production comes from open cast mines and therefore, one must add the quantity of overburden to that of the mineral production in order to assess the total amount of annual excavation in India's mining sector. The mining leases number over 9,200 and are spread over 21 states on about 13,000 mineral deposits occupying about 0.7 million hectares (0.2% of the total land area of India). The aggregate value of the mineral production in 1999-2000 was more than Rs 45,000 crore (approximately US$10 billion).

* A powerful influence is India's iron ore reserves, estimated at 22.1 billion tonnes (as of 2000) and of this about 6.3 billion tonnes are classified as resources, which is that portion that can be exploited currently. In 2004-05, India produced 141 million tonnes of iron ore and of this, about 80 million tonnes was exported. The states of Jharkhand (2.54 bt), Orissa (1.82 bt), Karnataka (0.74 bt), Chhattisgarh (0.66 bt) and Goa (0.46 bt) are the premier production and exporting states.

Orissa accounts for about 35% of India's total iron ore production, according to Sanjeev Chopra, managing director of the Orissa Mining Corporation Ltd. The state has granted a total of 126 iron ore leases of which 94 are operational and these yielded 41.8 million tonnes of ore in 2004-05. Orissa's iron ore is used in the production of hot metal at the Rourkela, Durgapur and Jamshedpur steel mills, in the plants of NINL, MESCO and Kalinga Iron Works, and in the production of DRI (direct reduced iron).

* The central government has relaxed foreign equity on exploration, mining and beneficiation of minerals. On June 21, 2005, the government of Orissa and Posco of South Korea signed a Memorandum of Understanding (MoU) to set up a steel plant at Paradip (also a port) with a production capacity of 1 million tonnes per year. This involves the development of captive iron ore mines -- whose production will be exclusively for the use of the steel plant. The envisaged inflow of FDI is USD12 billion (Rs 52,800 crore) and the first phase of production will begin in 2010. The Orissa government has signed a total of 37 MoUs accounting for a total capacity of 35.7 million tonnes per annum (mtpa) and that will bring total steelmaking capacity in Orissa to over 47 mtpa (well over India's current total steelmaking capacity) and which envisages an investment totalling Rs 118,000 crore. These plants will consume about 3.8 billion tonnes of ore over the next 50 years.

* The Tata Steel plant at the Kalinganagar industrial complex in Duburi is a development in two modules, each of 3 mtpa capacity, with a total investment of Rs 15,400 crore and for which the MoU was signed on November 17, 2004. Tata Steel's Kalinganagar works is one of the four 'mega steel plant' projects signed recently with the Orissa government, the others being the Posco (South Korea) 12 mtpa plant at Paradip, the Sterlite Iron and Steel Company's two-phase 5.1 mtpa plant at Palasponga in Keonjhar (MoU signed on 15 October 2004) and with a total investment of Rs 12,502 crore, and the Essar Group's Hy-Grade Pellets Ltd 4 mtpa plant at Paradip (MoU signed on April 21, 2004) with a Rs 10,721 crore investment.

The industry-state outlook towards minerals and their exploitation is best illustrated by a policy paper from the National Mineral Development Corporation. This states: "Infrastructure, political and policy structure that had hampered growth of iron ore industry in Orissa and Karnataka have undergone a sea change. The newer, pro-business political outlook has transformed the industry in these two states that currently register the fastest growth curves in iron ore production and conversion to reserves."

"The growth has however been mostly through small-scale semi-mechanised projects," the paper continues. "Such a situation is perhaps suitable for Karnataka that is endowed with lower grade ores, dispersed over larger geographic expanse, often in small pockets. However Orissa could be identified more with larger consolidated mining projects, which are more efficient in production and mineral conservation. The Jharkhand region had an immense potential for being world leader in mining industry. Political stagnation with poor law and order situation has significantly delayed its growth curve. Majority of the identified iron ore reserves are well explored and demarcated as proved reserves but the state significantly lags behind in actual production. The newly-formed state is now waking up to the situation and the government is seriously attempting to promote the mining industry in the state".

This is the exploitative vision at work. Nowhere in this and similar documents is there reference to sustainable development, equity and justice in mineral development and extraction, the rights of indigenous communities or even a resettlement and rehabilitation policy that goes beyond what is prescribed. For that is minimal enough. The central government does not have any rehabilitation and resettlement policy relating to extractive industries. However, some state governments and other agencies (public sector) have formulated rehabilitation policies -- Maharashtra, Madhya Pradesh and Karnataka have enacted laws for the rehabilitation and resettlement of project-affected persons. Orissa is however not among them.

"Rest assured that as long as industrialisation has to flow through the barrel of a gun as it seems to in Central and Northeast India, investors will increasingly run shy of India because we, its people, will protest and fight the proposals at every turn and will increase the risks to an extent that will render the investments unviable," states a protest letter following the Kalinganagar killings, and addressed to the prime minister.

The Indian government pretends, at international caucuses like the World Trade Organisation ministerial meetings, to play the role of 'leader' of the developing world, but at home, and in Orissa, it has been guilty of an arrant and callous capitulation to the key demands made by the global extractive industries, in utter disregard of the rights of those whom it is duty-bound to protect.

Indeed, the minerals industry has been smug through WTO meetings such as the recent round in Hong Kong. Apart from some further concessions sought under GATS (the General Agreement on Trade in Services), global mining giants already have most of what they want. They got their endorsements from the World Bank in the early-’90s, under the second phase of Structural Adjustment Programmes. That was when globalisation as a doctrine was sent forth under the auspices of the world's most influential 'development agency' to prey on the mineral-rich South.

Globalisation's trident has worked satisfactorily for the extractive industries -- liberalisation has prised open economies to foreign investment; privatisation has sequestered state-owned mining assets; and deregulation has emasculated nominally self-protecting mining codes. Initially, India’s government refused to incorporate wholesale the kind of legislation then foisted on Peru, Ghana, the Philippines and dozens of other countries. Now, India's political elite is bent, in quick time, at doing the country in by disembowelling our land and its people.

(Rahul Goswami is an independent journalist and researcher based in Goa)

InfoChange News & Features, January 2006

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