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Resource centre on India's rural distress
 
 

MINING & DISPLACEMENT: SAME STORY EVERYWHERE

Government of India is preparing to allot alternative sites to the South Korean mining giant POSCO for its Rs 51000 crore steel plant in Orissa because it fears a major tribal backlash against forced displacement from their lands and livelihoods. The plan is to ‘arrange’ alternative sites for the company without moving it out of the state. It is no secret that the hugely profitable mining industry thrives on corruption and opaque land transfers and is indifferent to the tribals’ main demand -- long-term rehabilitation of the displaced.

However, now when the Government is working on a Land Acquisition Bill, there is little effort on the ground to involve the tribals in their own affairs. The situation is not very different in other districts of the mineral-rich tribal region of India where national and international mining lobbies are awaiting transfer of humongous tracts of tribal and forest land. The area also happens to be dominated by the armed and underground Maoists who have declared a war on the Indian state.  

A long-term economic rehabilitation is especially hard to craft because the highly specialized nature of the industry makes it difficult for locals to participate because of the absence of relevant skills. Eg in Dantewara, the ESSAR plant is manned by highly skilled engineers from institutions such as IIT. In the villages around, locals are unlettered and work on their own farms or seek NREGA work. In effect, there are two highly disparate economies side by side but with no links to each other.

Following points in this backgrounder about mining and displacement have been provided to us by a senior journalist who is just back after extensively touring the area in many states:  

• Over the past decade, an expanding world economy's dramatic new hunger for metals has led to new highs in world metal prices, and to the liberalization of India's mining regulations, amidst a wider climate of inviting foreign capital.

• In 2007, Prime Minister Manmohan Singh paid an ode to this "massive growth in demand, perhaps to levels never visualized before" as he exhorted the steel industry to maintain a growth trajectory of 10%, or more, till 2020. Orissa, Jharkhand, Chhattsigarh and Karnataka are the major states witnessing investment in mining since the opening years of the decade.
 
• The areas with rich mineral deposits are home to some of India’s best forests, and culturally distinctive tribes. Most of these districts areas also pose the challenge of low human development indices for India’s governance structures, as well as a well-armed leftwing guerilla movement.
 
• Miners have paid a paltry royalty to the state (between Rs 20 and 30 per tonne), whereas prices in the world market at the height of the boom have been as much as 100 times that. This has made mining an extremely attractive economic proposition.The low rates of royalty, fixed by the centre, have also been a source of tension between the Centre and state governments (particularly those ruled by opposition parties like Orissa and Chhattisgarh), who are arguing for greater revenue, and control.

• Mining interests have enmeshed with local politics to make an invincible combine against any community voice - from Bellary, the biggest miners are powerful ministers in the BJP-ruled state government, to Keonjhar where politicians have mining interests. Profits have also been channelised into funding political activities, particularly during elections.

• This particular political economy has implications for a host of areas for the public from managing ecological damage (most of all destruction of forests, polluting of water resources) to having sustainable and meaningful rehabilitation. A CSE study estimates that 2.5 million people have been displaced by mining in independent India, with only 25% successfully rehabilitated. Some states have passed their own Rehabilitation laws, such as Orissa, but this has still not adequately addressed the issue of forced displacement.