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Far from being over the hill

The POSCO project in Orissa is still on course even as popular dissent remains firm, writes Manshi Asher.

india Updated: Nov 26, 2008 23:31 IST

The Khandadhar Hill Range in Orissa is a major attraction among the state’s tourists for its two waterfalls. But for the local tribal community of the Paudi Bhuiyans, the repositories of high quality iron ore deposits in the region are a curse. With the state government now likely to clear the prospective mining licence for 600 million tonnes of iron ore to Posco, the world’s second largest steel making multinational, the traditional bonds between the saal forests and the Paudi Bhuiyans of the Khandadhar hills are in danger of being snapped.

According to Ashwin Mahanta, a resident from the area who has been working with the tribals for the last 10 years, eight gram panchayats of the Lunipada block, with more than 50 villages within a 10 kilometre radius of Khandadhar, will be directly and indirectly affected by the mining activity that Posco proposes to carry out in an area of 6,000 hectares.

Kishore Chandra Giri from Phuljar, one of the 12 panchayats to be affected, is quick to react to any question about the project. “The Orissa Mining Corporation (OMC) has its mines eight kilometres from our village. They have ruined the agricultural lands around the mines by dumping wastes on the land and in the streams and our bamboo groves are completely destroyed.” But what bothers him more is the plight of his fellow villagers, of whom 20 are working in the mines and suffering respiratory disorders. To add to their misery, there is no accountability here as the contractors keep changing. The OMC mining story is just a smaller version of what is likely to come once Posco starts its operations here.

In Koida on the Upper Khandadhar hills, the red dust rises from the ground and creates a storm as trucks chug along the dirt-track roads through the excavated hill sides and fly-ash mounds. Several private iron ore companies have their captive mines here. Not far away lies the Bonai block where the highly polluting sponge iron factories are spewing poisonous gases into the air. From the air, the Lunipada section of Khandadhar is the only region that has been spared of factories and mines till now. The Posco project will change that.

“If Khandadhar [hills] are destroyed, then the whole subdivision will be destroyed,” says Laxman Das, a temple priest at Kuliphose village. Apart from the Bhuiyans, these villages are inhabited mostly by Gonds and Scheduled Caste communities called Patras, who practise agriculture. More than 26 streams from the Khandadhar hills flow into the Brahmini river, the range thus forming a critical watershed in the region.

While the social and environmental costs of this project should render the project unfeasible for the state, several analysts have raised questions regarding the very economic sense of the plan, specifically the mines. Posco has promised a flat rate of royalty at Rs 27 per tonne of iron ore to the Government of Orissa. Till early this year, the global market rate of iron ore was over $100 per tonne. Now with the recession, iron ore prices have taken a beating. “We suddenly realised that Posco has effectively been given this ore free,” write economists Sanat Mohanty and Sandip Dasverma. “Accounting for mining costs and the total investment package (less than 10 per cent of the costs), the people and the state of Orissa are getting less than 1 per cent of open market price of iron ore.”

The state government on its part has consistently recommended granting the Khandadhar Mines to Posco as promised. However, the matter fell in limbo after KIOCL, a public sector mining company, filed a case last year on the grounds that it had first laid claim on the mines and being a public sector company could not be denied that claim. In April 2007, the High Court deferred the case asking the Union Ministry of Mines to take a call on it. But before a decision could be reached, the Supreme Court, in the matter of forest clearance for the port and plant in the coastal area of Jagatsinghpur, directed the Orissa government to dispose of all Posco applications seeking prospecting licences within four weeks. It has been three months since the directive. But while the prospecting licence has still to be issued, news reports indicate that it will happen soon.

The mines are only one component of Posco’s Rs 51 crore project. The 12-metric tonne per annum steel plant and captive port are the other major components that will take up 4,000 acres of land in the area. The Sundergarh district, where Khandadhar is located, is part of the Fifth Schedule of the Constitution that gives the local tribal panchayats special rights to use, protect, control and manage their resources. That this constitutional provision is being violated in the most blatant manner across Orissa is well-known.

There is little doubt that the state would act otherwise, especially after it has backed the Posco project in the face of popular protests, even though assembly elections are round the corner. The arrest of the anti-Posco project agitation leader Abhay Sahoo on October 12 this year is an indication of the government’s intention. But the Paudi Bhuiyans may yet surprise the people and government of Orissa with their quiet resolve and determination to protect Khandadhar.

Manshi Asher is a writer and researcher on social and environmental issues.