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Orissa sits on one of the largest reserves of bauxite in India —around 2.5 billion tonnes — but its record in developing these mines or allocating them to private parties is abysmal. Of 10 identified big mines with potential reserves of around 1,489 million tonnes (mt), only one mine — Panchpatimali, with proven reserves of 314 mt — is functional. The mining lease for it is with the state-owned aluminium producer Nalco, granted back in 1979.
The last mine the state government allotted was in 2007 — Maliparbat mines with reserves of 9.8 mt — to AV Birla Group company Hindalco. However, no mining has taken place due to opposition from the locals.
Apart from Anil Agarwal's Vedanta Aluminium, whose R50,000-crore investment in the state is stuck because of the opposition of local tribals against mining of bauxite from the Niyamgiri hills, AV Birla Group’s Utkal Alumina project had also to undergo a tortuous journey. The company was allotted the Baphilimali mines with deposits of 195 mt in 1992 but faced delays due to opposition to mining.
This slow and protracted policy of allocating mining leases means private aluminium producers have to either import bauxite or procure it from other states.
Bauxite is the key raw material that produces alumina, which is then converted into aluminium. According to Orissa’s policy, bauxite cannot be moved out of the state and the value-addition — conversion into alumina — has to be done within Orissa.
Companies interested in mining bauxite are first granted a prospecting licence. The company then has to tie up with a partner for converting bauxite into alumina and only then is the mining licence granted. For actual mining to start, forest and environmental clearances are required.
The Niyamgiri episode where the objection to mining from the local tribals on the ground that it is the abode of their deity Niyam Raja is not without precedent. In the 1980s, the state government had allotted the Gandhamardan mines with reserves of 207 mt to Balco. It was opposed by the local population who believe the place was visited by Hanuman who came in search of the herb sanjeevani. There are two ancient temples there to commemorate the belief. As a result, Balco had to abandon the project.
“It is the indecisiveness and policy paralysis on the part of the state government that has created such a scenario,” said Ramesh Mohapatra, chairman of Utkal Chamber of Commerce and Industries, the state’s apex industry body.