Mining trouble

Rejection of Niyamgiri mining throws up knotty questions

Vedanta's aluminium refinery in Lanjigarh in Odisha cost Rs 5,000 crore and is capable of producing a million tonnes of the metal a year. However, ever since its commissioning in August 2007, it has had trouble sourcing its raw material, bauxite. It was promised ore by the Odisha government's state-owned mining company from the Niyamgiri hills nearby; but that promise did not take into account the strong opposition that the local Dongria Kondh tribe had to mining in hills that they say have religious significance to them. The protests attracted nationwide attention; even Congress Vice-President Rahul Gandhi promised to intervene. And then, naturally, the Union environment ministry cancelled the required clearances Vedanta had been granted, in August 2010. The plant appears to be uneconomical without local bauxite; it has already closed operations once for seven months before resuming refining using non-local ore, which adds over 200 per cent to the cost of the raw material. The refinery may well have to be shut down again.

The Supreme Court in April told the state authorities to submit a report to the environment ministry within three months that got the views of local gram sabhas. It now appears that at least eight out of the 12 gram sabhas have passed resolutions against mining. These gram sabhas do not own or legally control the land proposed to be mined from one hilltop; they are the councils of all those villages along the lower slopes of the Niyamgiri hills. Nor, according to reports, is the ministry bound by the views of the gram sabhas, as bauxite is a "major mineral" according to the law. The Supreme Court had also indicated that the gram sabhas be free of "outside influences", but, as this newspaper has reported, several NGO representatives, including a local Congress MP, were seen during the meetings. But the Union government, given the political salience of the case, is unlikely to be able to overlook the objections of the local councils. It certainly appears that Vedanta's sizeable investment in Lanjigarh and the chance to produce more aluminium domestically, which could ease India's supply constraints, are both in trouble. In London, Vedanta Resources reported this week that both quarterly revenue and profits had fallen 23 per cent year on year.

The long battle over Niyamgiri throws up some knotty problems. For one, exactly how much of a veto can local communities have? In this case, can local people prevent the mining of any part of an entire range of hills on the basis of their religious beliefs? This is not a question of property rights, since the minerals underground are indisputably owned by the state, and the land above ground is not owned by the villages. Further, to what degree should religious belief play a role in matters that should be decided, essentially, on the basis of property law? While it is true that the Indian state has had a long history of exploiting tribal communities, and of not paying them a fair return for mining in their neighbourhood, the difference between that and allowing anyone a veto on religious grounds over the use of large stretches of land should be evident.