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Odisha's POSCO dream and the complex Khandadhar mining nut


Last updated Wednesday July 06, 2016

Odisha, Posco, Khandadhar, Mining  
States like ours that are gifted with abundance of resources over and under the surface. Instead of opening roads to plunder, the states should rather focus on more rewarding sectors capable of providing more employment and more income to the people. Odisha should not always portray the old image of ‘rich land, poor people.’ It’s already high time (to say), that’s a myth and now we must break it. Our land, Odisha, is obviously rich. But we do not have a stake to loot and destroy the precious natural resources reserved in it. Rather, we are the custodians to maintain and preserve the inherited nation’s natural wealth for our future generations.  

Bibhuti Pati


There were no other important issues, bilateral or international, for discussion between the Indian Prime Minister Manmohan Singh and the South Korian President Park Geun-hye except POSCO! It seemed to us, POSCO was the only thing and other issues were insignificant! Manmohan Singh had the old lyric POSCO and Geun-hye soon put the music in Singh’s lyric and then both sang the POSCO song for public. Before that, the stage was prepared by the Forest and Environment Minister Veerappa  Moily to make it the most valuable pre-election melody.

This was really unfortunate and more unfortunate was the PM’s use of words like ‘easing of the restrictions’ and ‘speeding up the POSCO project’ ramming over the people’s struggle for rights to survival.


A biodiversity expert Bimal Prasad Pandia says, “People have reason to believe that those who run the governments, at the Center and the State, are keen on pleasing the powerful mining and corporate lobby. These mining companies only aim to loot and destroy, permanently, the resources that we have inherited from our ancestors, which the government is duty-bound to preserve and protect as the custodian. But the governments are hell-bent to sell those precious natural resources while causing further damage to the social, economic and environmental balance and, in advance, ruining the life of future generations.”

“Those pushing the cause of the mining lobby and the governments talk about economic growth and employment potential theses industries promise. Such arguments have been contested with solid facts and evidences from the past. Taking a cue from the latest development   in New-Delhi, it is important that these claims be given a closer examination,” Pandia added further.

Odisha officials say that the delay in realization of country's largest foreign direct investment project is partly due to South Korean steelmaker POSCO's reluctance to create a favourable environment. Officials blame POSCO INDIA for not helping its own cause.

"They are reluctant to spend any money on corporate social responsibility or plantation works until all clearances are in place. It's frustrating because it doesn't really help its own cause," a senior state official said seeking anonymity.

The state had asked the steelmaker to spend on projects - such as building roads and housing for those to be displaced and plantation work required as per the green norms – that could pass for CSR and periphery development. POSCO India didn't start any of it waiting for its mega steel project to get key clearances and the right to prospect iron-ore reserve identified for the steel plant.

One POSCO top officials, on condition of anonymity said, "Our philosophy, ideology and nature of work are very different. We do CSR activities around the world, India will be no exception. We were under the impression that progress of a project is not directly linked to CSR. But things have to move on the right track. January has seen some progress. The virgin 200 million ton iron-ore reserve that POSCO hopes to mine has been recommended again by the Odisha government.”

India’s largest mining and mineral processing companies like Steel Authority of India (SAIL), TATA Steel including Corus, and NTPC together employ only three fourth of what technology major TCS does. The current employee strength of TCS is 276,196 while SAIL-103,130, TATA STEEL- 80534 and NTPC-25,484, as per the official data.

TCS reported a quarterly net profit of Rs.5314 crore. This is nearly 15 per cent more than the combined second quarter net profit of SAIL, TATA steel (including Corus) and NTPC. The three companies reported a net profit of 1180 crore, 917 crore and 2439 crore respectively.

May be, one can say, these figures do not tell the whole truth and we as a nation require power and steel too. Mr. Pandia argues, “Fine, but then, we must not also forget that for power and steel we pay a heavy price – a price that the current generation owes to the future generations and other living beings. We have to be careful about the equilibrium.”

In his argument Pandia criticized to government and said “States like ours, instead should focus on more rewarding sectors, which provide more employment and more income to the people.  Odisha should not portray always an old image of them being of the ‘rich land, poor people’ kind. It’s already high time, that’s a myth and now we must break it. Our land is obviously rich. But we do not have a stake to loot and destroy the land’s precious natural resources. Rather, we are the custodians to maintain and preserve this inherited nation’s natural wealth for our future generations’ welfare.”

Revalidation of environmental clearance by the MoEF and giving clearance for the prospecting license for Khandadhar mines to Posco has led to a spurt of activities in Odisha. And things have started to happen fast. While on one hand the state machinery and district administration have geared up, different people’s organizations – both the supporters as well as those opposing it – have started preparation for the last leg of the battle. But, contrary to the expectations, POSCO is still calm waiting for all the clearances, and seems not to be in a hurry.

The day after the revalidation of Environmental Clearance, Odisha Government has started the process of handing over land to POSCO. Industrial Development Corporation (IDCO) has asked Posco-India to deposit Rs 54.21 crore towards the cost of 2193 acres of land to expedite the project work at the plant site. Construction of the boundary wall, distribution of the subsistence allowance to betel vine labourers etc. are being expedited by the district administration. The meeting of the Rehabilitation and Peripheral Development Advisory Committee (RPDAC) has already been fixed for the last week of January and the district administration has prepared the agenda for this meeting.  Seeing such promptness of the district administration, one only wonders if it is the same administration that takes months together after a lot of cajoling, posturing etc. to respond to a complaint of a poor villager. Or, the administration at the district level is eagerly waiting for the clearance to fulfill a long overdue commitment made to POSCO and demonstrate how prompt and efficient it is.

After the revalidation of the environmental clearance, it is but natural for the Posco Pratirodha Sangram Samiti (PPSS), the people’s organization that has been on the forefront of resistance to POSCO, to swing into action. While they have started holding meetings and garnering support from different environmental groups and the public in general, they are also strategizing their future course of action. But, they are pinning a lot of hope on the National Green Tribunal that is to give a verdict on the forest case.

On the ground, Abhaya Sahu of PPSS confirms to intensify the struggle till POSCO is thrown out of the place. Local leader Jibanlal Behera of Gadakujanga Noliasahi demanded that the land acquisition be done as per the new land acquisition act that mandates the agreement of at least 80% of households in the village.

Now, even the supporters of POSCO have started protesting. The groups supporting POSCO have welcomed the environmental clearance. They even met the local officials. But very soon their voices turned vile. The United Action Committee (UAC), a network of the groups supporting POSCO, blames the administration and POSCO as well saying that both have been indifferent to their demands. Tamil Pradhan of UAC said that “Posco officials and the administration acquired the land. But now they are changed. They do not care for us. They have not met the demands of people.”

The villagers of Noliashahi, Polang and Bhuyanpal, to be displaced for the Posco project, are on protest since 13th January. The 14 points pressed by them include the demand to halt construction of the boundary wall till the demands of people are met. They even have threatened not to give a single inch of land to POSCO if their cases are not heeded to. Village chief Jeevan Lal Behera said, “The villagers are not against POSCO. But they want their demands be fulfilled.”

Despite the resistance by the pro-POSCO groups, the district administration is continuing with boundary wall works. The District Collector Satya Kumar Mallick once again reiterates that “the administration is committed to resolve the issues raised by the villagers. RPDAC meeting is being called by the administration to discuss the issues.” He also appeals the villagers to call off the demonstration.

Those supporting POSCO are also a divided house now. One group from Nuagaon village led by Tirtharaj Mohanty assembled at Sidhhakumpa and resolved to collectively stop all company activities till the demands are fulfilled. 

It is worth mentioning here that Nuagaon is strategically important for POSCO. The company, with the support from the villagers of Nuagaon only, could start its field office here and could also start the construction of the boundary wall from here.

The villagers are in pain as the administration, with support from a particular group, continues the construction works without discussing the issues regarding employment of local boys, rehabilitation and other demands. 

The other group has sent a memorandum to the Chief Minister, Chief Secretary, Revenue Division Commissioner (RDC), District Collector etc. with more than a thousand signatures of people from three GPs. The demands include discussion with people directly instead of traditional POSCO supporters.

Some see that the division in the supporters’ camp is because of a desire to have share in the construction and contract work being carried out or to be carried out by the government. But, to most others, the administration and the company have seeded this difference by discriminatory treatment in awarding construction works.

Recommendation of the Odisha Chief Minister for giving Prospecting License (PL) to POSCO has opened a new front for the state government as well as POSCO. Various organizations in Bonai including Khandadhar Surakshya Samiti have already registered protests through meetings and demonstrations. The iron ore for the mega steel plant will be mined from Malantoli in Khandadhar.  

Khandadhar hosts a magnificent water fall amid rich biodiversity. Luthar Oram of Khandadhar Surakshya Samiti apprehends that mining in the area may destroy the water fall, the habitat and cultural soul of a primitive tribe like Paudi Bhuyan. Apart from 34 Paudi Bhuyan villages, people from Kuliposh, Talabahali, Bhutuda, Ghuntgaon, Haladikudar, Khuljhar etc. are now united to fight to save Khandadhar.

Now Marxist Communist Party (CPM) has thrown its weight behind the anti-mining stir in this tribal hinterland. It has decided to launch a massive protest to stop Posco from exploiting Khandadhar and Malangtoli. “The decision of the state and the Central government would have a great negative impact on the lives of the people in 15 Gram Panchayats in Bonai subdivision”, CPM state secretariat member Bishnu Mohanty said in a recent press briefing adding that “The flora and fauna of Khandadhar region would vanish forever. This area will lose its tourism potential.”

To water management expert Tapan Padhi, “Mining in Khandadhar will impact the flow of river Baitarani. And this time it will not be easy for the government to refute this apprehension. Denudation of the hills, from where the water falls like Padhanpat (Debgarh), Khandadhar (Sundergarh), San-ghagra and Bad-ghagra (in Keonjhar) have originated, has resulted in substantial reduction in flow of water. During the last decade, flow of water supported by these waterfalls has reduced by 50%. Any further reduction of water flow due to mining activities in the catchment will be the last nail in the coffin for these waterfalls.” Citing that “the Divisional Forest Officer of Keonjhar in his letter (no 4459 dated 23/07/2008) to half a dozen iron ore mines has already put it in record that deforestation and iron ore mining has resulted in drying up of Kandranalla and Suna Nadi near Joda township. Drying up of streams and rivers has resulted in water scarcity for the wildlife, especially elephants, forcing them to stray into human habitations and create havoc.

Even the Chief Minister Naveen Patnaik, while responding to an un-starred question in Odisha Assembly (26/06/2010), has admitted that denudation of hills is responsible for reduction of flow of Pradhanpat waterfall. It will not be that easy for POSCO and MoEF to avoid these facts and rationalize the reduction of flow of water in these waterfalls while granting an EC for mining at Khandadhar.”

Despite the all-out efforts by Dr. Manmohan Singh and Odisha Chief Minister Naveen Patnaik, getting the mining tangle sorted out seems to become a tough task. First of all, part of it is in the 5th Schedule area and the population of the mining area mostly comprises of the Paudi Bhuyans, a particularly vulnerable Tribal Group (PVTG). As to Medha Patkar of Narmada Bachao Aandolan, “the Union Government as well as the government of Odisha are creating troubles for the Paudia Bhuyans.” It would not be surprising if Khandadhar turns out to be another Niyamgiri for POSCO.

Whatever perceptions or assumptions the politicians and bureaucrats might be having, but POSCO seems to have sensed the troubles on its way to mining lease. This is perhaps the reason why POSCO does not want to open its purse until and unless all the clearances are in place even though the bureaucracy is desperate to carry the project forward. A state government official, on condition of anonymity, has said, “POSCO is to be blamed for the delay. The state had asked it to spend on projects like roads, housing for the displaced, plantation etc. which would have helped the company in wooing local people. But POSCO is waiting for all the clearances.”

On the other hand, those who are in touch with POSCO officials are of the opinion that POSCO may not put the project on fast track until it gets the captive mine. As told by Medha Patkar of NBA, Posco will be able to pocket 3 lakh crores a year from captive mines through the existing arrangement. And secondly it does not want to be in the same bracket as that of Vedanta. So mining is the bull’s eye that POSCO wants to hit. The rest are just peripheral. Now it is to be seen how the Union Government, the State Government and POSCO crack this complex mining nut.


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