People's Democracy

 Stop This Loot Of Mineral Wealth

Left Opposes POSCO Deal In Orissa, Seeks Intervention Of PM

A delegation of Left and democratic parties from Orissa, comprising CPI(M), CPI, JD(S) and OGP met the prime minister Dr Manmohan Singh on June 17 and submitted a memorandum demanding his immediate intervention in preventing the loot of mineral wealth taking place in the grab of industrialisation in Orissa.

The delegation of Orissa political leaders was also accompanied by CPI(M) Polit Bureau member Sitaram Yechury, CPI(M) leader in Lok Sabha Basudeb Acharia and CPI secretary D Raja. The prime minister assured the delegation that he would go through the issues raised by them and take appropriate action. Among those who met the PM included CPI(M) Orissa state secretary Janardhan Pati, CPI(M) former MP Sivaji Patnaik,  CPI leader Nityananda, JD(S) leader Krishna Chandra Patra and OGP leader Bijoy Mohapatra.

Following is the full text of the memorandum submitted by the delegation.

WE would like to bring to your urgent notice the loot of mineral wealth taking place in the garb of industrialisation in Orissa. Pursuing a faulty agenda, which has no space for transparency, sustainable development or regard for generations to come, the Orissa government is auctioning un-replenishable national property. It is irrational and dangerous. It runs counter to both “sustainable development” and reforms with a human face, or to put it in other words it aims at high sounding investment minus economic development of the people.

Vast areas (30,000 acres) of rich coastal agriculture land in Jajpur and Jagatsinghpur districts are being handed over to MNCs. Farmers are being forced to become daily wage earners. Mahanadi, Brahmani and Vamsadhara river banks on which civilisations grew and thrived are now threatened with pollution due to indiscriminate bauxite, chrome and iron ore mining.

Amidst a virtually mad “Steel Rush”, the Naveen Patnaik government has already signed 36 MoU’s with major industrial houses.  And there are more to come, including South Korean steel major POSCO. We are not opposed to industrialisation of Orissa, but a close look convinced us that industrialisation carried on by this government is just a façade as the state government is seemingly inclined to auction our precious mineral resources at prices cheaper than a plate of Palak.

As you must be aware, negotiations are on between Orissa government and POSCO for setting up of a 12 million tonne steel plant at port city of Paradeep in Orissa. We are constrained to seek your time as the proposed deal with POSCO is brazenly against the national interest with Korean steel major’s hidden agenda to get control over our precious ore.

Here are some more details on proposed POSCO deal so as to convince you as to why we think it is not fair and goes against the interest of our nation:

1. Since this will be the first-ever FDI in mining, is this project legal under the existing FDI laws? Moreover, does the state government have power to allow this project? POSCO’s hype of Rs 39,000 crore FDI and 123 million tonnes steel capacity phased over 10 years needs to be analysed, understood and unmasked. Put simply, POSCO is asking for 1,000 million tonnes ore body, which is equivalent to 30 per cent of total Orissa deposits. If conceded, the moot point is how long our ore reserves are going to last?

2. The state government, we doubt, is not trying to realise the maximum possible from our stalk of iron ore. The mandatory questions like – how much do we get for our iron ore? Who benefits? Does the benefit percolate down to the poorest of the poor? The mining resources, if exported this way, will be exhausted from the state after 25 years. Hence, it is high time that a ban is imposed on the export of iron ore and the value addition to a greater degree be made a pre-condition for setting of an industry.

3. Moreover, the unemployment problem is extremely acute in Orissa. The MNCs and steel giants do not give adequate employment facilities to the needy unemployed youth of the state, which is a serious concern for us. Their capital-intensive technology that intends to maximize the profit cares little to provide jobs to the job seekers in Orissa.

4. The state government is not sticking to international market rates while offering to make its iron ore reserves available to POSCO, which currently varies between the range of Rs 2000 to Rs 26,000 per tonne. Instead, it has set to prefer the “royalty per tonne” route which means it has no qualms to hand over ore bodies at substantially lower prices. Moreover, royalty is not ad valorem which means that even if there is a spurt in iron ore prices in the future, the company benefits, not the people.

5. We are informed that the Brazilian government has insisted on purchase of ore at international market price and did not approve handing over captive mines to POSCO. It has also rejected other terms of POSCO and hence the company preferred Orissa. Can’t we adopt the Brazilian stipulations and ask our own PSUs to sell ore to POSCO at international price rather than allot captive mines and invite plunder of ore for exports. Can’t the government consider the Chinese model of joint venture in steel sector rather than 100 per cent foreign ownership?

6. POSCO managers in Korea have so far approved the proposal for a 3 million tonne (MT) steel plant. There is no talk of 12MT plant as is being claimed by the Orissa government. In that case if a 3MT plant is being planned initially why to give away iron ore mines to the company for a 12MT plant?

7. The most valuable Gandhamardan and Malangatoli iron ore mines are being recommended for POSCO. If this is given to POSCO, it becomes a classic case of robbing Peter to pay Paul, because the mines are with OMC, a profit making state undertaking. Had the OMC been allowed to exploit and sell at market price it would be at the rate of Rs 2000 per tonne. POSCO will exploit it at a production cost of Rs 400 per tonne. So, the state actally stands to lose Rs 1600 per tonne. Multiply this with 600 million tones, which amounts to Rs 96,000 crore –– almost, double the investment of POSCO.

8. POSCO apart, there are various national majors who are keen to set up steel plants in Orissa. The MoUs have been signed. Going by the mega plans of the state government vis-à-vis the iron ore deposits, it is evident that Orissa is going to be bereft of ore after a decade or in little more years. This, we think, is a confused agenda that lacks vision. Add the combined land requirements and other logistics, that too in fertile coastal tracts, it is sure to end up turning sizable number of farmers into a livelihood-less army with only one option to become daily wage earners. We would like to reiterate that as proud citizens of the country we are not opposed to industrialisation. But we are certainly against the idea of bartering our precious mineral wealth at throwaway prices to private greed. The state government’s messy mindset concerning road to industrial development is already known when the Orissa High Court even passed strictures against its controversial Tangarpada mining deal with the Jindals.

There is no clear policy for sustainable and scientific exploitation of our mineral wealth. The absence of a rehabilitation plan for the displaced is equally glaring and has led to violent clashes in several places and tribals felled by police bullets. No holistic environment impact assessment has been done so far.

NALCO

The NDA government’s efforts to divest Nalco had invited the wrath of people of Orissa in the past. Each and every quarter here had opposed it and a successful Orissa bandh was observed. Disinvestment of Nalco runs contrary to the CMP, which debars offloading of shares of any profit making PSU. After contributing thousands of crores of rupees to the central and state government in term of taxes and royalties etc., Nalco has earned a net profit of Rs 4091.50 crore. The expansion programme, which has already started with a project outlay of Rs 4091.51 crore, its rate of profit will increase further along with the scope for downstream activities and new avenues of employment. We implore upon you to drop any idea of divesting Nalco. Because Nalco in the last five years has proved its excellence, doubled its profit as well as exports and established itself as an international  aluminium major. People of Orissa feel proud of Nalco and are sentimentally attached to it. They will not tolerate any disinvestment of Nalco.

We have come expecting suitable and timely measures from you to stop the proposed disinvestment of 20 per cent equality from NALCO and also to stop these faulty industrial plans of the Orissa government that are far away from what we call “sustainable industrial development.” For mere extraction industries, world over, have never eliminated poverty.

We implore upon you to stop the state government from plundering national wealth existing in Orissa and conduct a thorough enquiry into all mining deals, including that of the POSCO proposal since the authority of the government of India under the MMRD Act is supreme. (INN)