Thursday, January 12, 2017

From Safe Havens to Tax Havens

The Mining Game Plan suiting State, Corporates and the Maoists must be abandoned
This is the reality of mineral richness and the politics of mining and money making in Chhattisgarh has become a zone of war. The State is more in focus in the recent days with the brutality unleashed and confrontations with extremists and loss of innocent lives from both sides and mindless pursuit of mining in the State. This is where the Prime Minister goes and announces a Mega Steel Plant for the benefit of the tribals!
Mining is perhaps the most destructive economic activity and Chhattisgarh being one of the mineral rich states has to unwittingly be a party to this profitable sector. In the madness to proclaim this model of development a success, such exploitative activity is politically and legally justified.
If we trace the history of any of the operational mine, the initial period was virtually a battle to push the local community aside to enter into the mining activity. Once huge profits are made they enable huge rents the entire system gets vitiated. Isolated such displacements and elimination often go literally un-noticed.  When an entire mineral belt is rapidly mined rapaciously, simmering discontent leads to anger and violence and gets to be the veritable space.
 So in the context where our mining industry and the mining sector is more tending towards the kind of methods that were in practice in the worst of its periods rather than as a limited economic activity, it has become a norm to violate all the laws and return with huge profits and in the event of any down turn renege all your commitments. Maoism and violence is handy once such circumstances are created.
Two decades ago what was a safe haven amidst the enclaves created by the reservoirs in the heat of the greyhounds and other state created entities in adjoining regions, has become a theatre of war. An estimate of around 7000 armed Maoists are made but even this data can never be credible. Let’s assume its correct. In contrast, just after 2013, over 25000 armed paramilitary personnel have been deployed in Bastar alone as per official statements. This is besides all the SPOs to other normal police forces and led by some of the ferocious and notorious officials, epitomised by the current IG.
Isolated areas with low population densities and rich mineral resources are ideal for both miners and Maoists. The huge exploitation provides a reason for sympathy, the isolation provides for certain opaqueness in operation, the need for explosives to mine -almost a kilogram for every tonne of ore produced provides ammunition. And over time this has settled into a tenuous economic and force equilibrium where the Maoists and the State including paramilitary forces pervade the space.
Eventually the local people have to be cleared as the last “overburden” for this profitable but intense and tenuous equilibrium to co-exist.
If it were not so, the slurry-pipelines to rail-lines exclusively meant for the ores seem to be more secure than a battalion of paramilitary forces.
See these two incidents, one on first of April 2015 and the other of same April Fool’s Day in 2016. It clearly points out that both actors are similar in their practice and therefore they are there to compete and not to resolve.
April 1 2015
Five employees of Jayaswal's Neco Company and few locals including drivers and machine operators were abducted and later released by about 10 armed CPI-Maoist cadres from Chargaon, Metabodli iron ore mines in Kanker District of Chhattisgarh. One of them was released soon after abduction while others were released in evening. Maoists had targeted to abduct important and senior officers but didn't succeed therefore released all of them. Maoists apparently opposed construction of roads and mining in the region and the supervisors and managers were out on inspection when the incident took place.
The villagers of Chintagufa from Sukma District of Chhattisgarh have claimed that the person killed in an encounter with the CRPF's CoBRA team on March 31 was "an innocent villager" and not a "Maoist".
1 April, 2016
On 1 April, officials from the state revenue department demolished three houses belonging to two families – including a Gond Adivasi family - in Bankheta village in the district of Raigarh for the expansion of the Gare Pelma IV/4 open cast coal mine. The mine is operated by Hindalco Industries, a part of the Aditya Birla group of companies. Human rights defenders protesting the evictions were detained briefly for allegedly obstructing public servants. The government had acquired land for the mine in 2010.
Following protests over the evictions by other human rights defenders and members of affected communities, on 2 April, the Additional Collector and Additional Superintendent of Police of Raigarh stated in writing that all evicted families would receive compensation and rehabilitation within 15 days, and that the cases against the human rights defenders would be dropped.
In my visits to the mining belts of Chhattisgarh it is very often that you see seasonal operators. Whenever they get an order they know where to quickly quarry and sell it. The state has no credible information. Take, an incident like this as a report said “The Maoists set ablaze at least 17 vehicles engaged in mining work in Kanker District of Chhattisgarh. Armed Maoists attacked the Barbaspur iron ore mining site under the limits of Korar Police Station and after threatening the labourers, torched 17 trucks deployed for mining work. They then fled into the forest.”  The attribution may be totally incorrect as may be one the seasonal operators for all we know. Thus while the Maoists themselves have a tendency to exaggerate their strength, the state plays a helping hand in attributing illegal mining mafia to their strength. While the real operators of minor minerals who raid river-sand are small-time mining mafias but just as the nexus with politics is so tight that with major mining areas extremism thrives.
In the height of the Chinese and Korean booms a tonne of iron ore raised and sent at a cost of Rs 300/tonne was selling at around Rs 6000 a tonne. NMDC’s operations rake in such huge profits. Its audit report states in the financial year 2014-15, EPS – Earning per Share - that for a Re 1 share the returns were Rs 16.20! If our perceptions about the efficiency of the Public Sector that it is inefficient in general are correct, the private players are making multi-fold profits. The reality is, if State institutions are themselves so exploitative and insensitive, how they could ensure that the rest of the industry follows the norms. This is a legitimate Government owned company. Even today the price is over Rs 3000 a ton.
It is not only the iron ore mining, the entire mining and industrial sector is using public money to usurp the resources and more and more people are being marginalised. This becomes a potent breeding ground for resistance. People have nothing more to lose. They have lost the livelihoods and lifestyles. The miners have made millions. You pull out the ore and the water and pump it hundreds of kilometre and ship it across the globe and the entire system becomes opaque. Thus the safe havens of Maoists have become the source for resources for the corporate to enrich the Tax Havens.
A person from a leading political party told me that their policy was clear – South Chhattisgarh has huge mineral and Forest Wealth and needs Military and Central Government to get out resources. The low population density and therefore fewer number of assembly segments means it is not important politically. If others are equally unpopular they could win seats. The rice bowl north of it, central Chhattisgarh has the maximum population density and needs nurturing and almost pandering to win maximum number of seats. The northern portion can still be left to the industrialists without much loss of political positions. He said after all you are politics to capture the assembly!
Ours is a country where we get legal information through the questions in the Parliament on the “illegal” mines. We have a whopping 100,000 of them as compared to 10,000 which probably has some clearances. Only a third report to the regulator and a tenth of them are perhaps ever inspected. There is absolutely no regulatory over sight. That most of the FDI is “round-tripping” The State is out to ease their business further!  The recent arbitration claim of USD 44.7 million by ANRAK from the Andhra Pradesh Government for not providing bauxite for its refinery which was to come from Jerilla may push the government into action and in the name of the Maoists brow-beat the local adivasis to allow for mining in this ecologically sensitive areas.
Potential violent exploitative mining scenario is emerging in South Chhattisgarh and perhaps may extend into the Jerrilla mines, in the five decade old mining zone rich in high quality iron ore and bauxite. This is reminiscent of the years of brutal mining for diamonds in Sierra Lone where local people were caught between mafia groups, security forces, industry armed security groups and are yet to recover ever since. Unless dramatic changes to reduce the rate of mining and ownership of resources and rights are established for the communities the situation could head to such an irretrievable situation very rapidly. The mining game plan of the State has to be abandoned and must be able to rebuild credibility with the community. The State and the Corporate have lost credibility and now even the credit in the emerging economic scenario.
This is not an alarmist proposition but a call for reasoning and response.

Major Mineral
Rs Cr
Rs Cr
 Royalty as % of Value
Iron Ore
Directorate of Mining and Geology; Chhattisgarh

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