Editorial: Orissa needs a Plan B

Jul 31 2013, 05:39 IST
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SummaryVedanta needs mines with all clearances in place

With the majority of gram sabhas rejecting the Orissa Mining Corporation’s (OMC) application to mine bauxite for Vedanta Aluminium, the latter’s R50,000 crore investment in the state is in trouble. While it is true Vedanta hasn’t yet increased the capacity of its aluminium plant from 1 million to the planned 5, much of the investment has already been put in place—employment in Lanjigarh is down from over 16,000 when it began operations 3 years ago to under an eighth now. Doing so without getting the necessary bauxite mining permissions may have been a bit foolhardy—when it was state-owned, Balco also had to give up a mining lease on grounds it hurt religious sentiments—but the company felt it would always get high-grade ore since the state is swimming in bauxite with about 2-3 billion tonnes of bauxite reserves.

Which is why Vedanta itself has now applied for 26 more mining licences with an estimated 500 million tones of ore in place—it needs 13.5 million tonnes a year for its 5 million tonne refinery—and OMC for another 11 with around 300 million tonnes of ore. Since an inter-ministerial group has already studied the applications and submitted its report to the chief minister, presumably the mines will be allocated—how soon is the question since, while the Niyamgiri area has been a bone of contention for years, the state could just as easily have allocated OMC or Vedanta other mines near its refinery. While getting the mines will take time, getting environmental clearances promises to be another headache—clearances for the Lanjigarh operations have been 7 years in the making and may not happen now. If India, or Orissa, are looking for one of the worst advertisements for how wrong things can go for a company that has invested R50,000 crore, they can’t get a better example.

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