MONDAY, 07 JANUARY 2013 00:13

The Vedanta Aluminium, which has invested a whopping Rs50,000 crore in its aluminium and power projects in the State, is now on the verge of total closure.

The future of around 7,000 families, who are directly and indirectly earning their livelihoods from the 1-million-tonne-per-annum capacity refinery at Lanjigarh, set up with an initial investment of $ 1 billion, is now uncertain. All assurances by the Government to provide bauxite for the refinery have come a cropper.

Plant’s COO Dr Mukesh Kumar confirms, “The cumulative losses from the unit have crossed Rs2,500 crore and the company has hardly any other viable option left.” The crisis has all the potential to scare off other investors in the State.

President of Lanjigarh Anchalik Vikas Parishad Shridhar Pesnia, who is in the forefront of the movement to save the refinery, says, “The closure of the unit will be a setback for the company, but for the people of Kalahandi it will spell total disaster. The area will slide back to the days of starvation, disease and abject poverty. Never will any other company dare to invest in this backward area. The fate of Kalahandi will be sealed forever.”

While the closure of the refinery, which represents the single largest investment in Kalahandi district, will roll back the long-term development efforts, it will also bring in a lot of hardship to the people who are employed there as well as those who earn a living because of its economic ripples.

Sujata Mohanty, employed with the plant’s HR department, pointed out, “The human cost of misery involved in the closure of the unit will be impossible even to calculate. As it is, people are facing difficulties in getting a job, and now the locals will have to migrate away from the State in search of livelihoods.”

Triggered by a landmark judgement of the Supreme Court in 2008 which had directed the company to pay 5 per cent of its profits or Rs 10 crore annually, whichever is higher, for tribals’ development, a lot of visible changes had taken place at the ground level. Shrikant Bohidar, who works in the CSR department says, “The company till date has invested more than Rs 170 crore on community development projects. Never before had this amount of money spent on developing infrastructure and livelihoods in Kalahandi. Schools, hospitals, scientific farming methods, shifting to cash crops, midday meal schemes, etc., will now be affected.”

Hari Majhi, a project displaced person currently employed with the company, is now deeply anguished. “My daughter is right now studying in the DAV school run by the company. What will happen to her future? We gave our land for the company, and now the company itself is closing down.” There are hundreds of people like Majhi whose children were enjoying the benefits of modern education in such a remote area.

What makes the situation extremely grim is the fact that in the last three decades not a single bauxite mine has become operational in Odisha. It, therefore, is an irony that while Vedanta’s refinery is virtually surrounded by about two billion tonnes of bauxite reserve, the company has to source its raw material from a cocktail of sources ranging from Gujarat, Madhya Pradesh, Chhattisgarh and Andhra Pradesh. Besides the exorbitant cost of hauling the bauxite from the far-flung States, even these sources have now dried up.

And there is another disturbing development that speaks volumes about the callous attitude of the Government. While on the one hand the Vedanta refinery has already shut, there is also a danger of its aluminium smelter located at Jharsuguda facing a similar situation. Right now, the smelter is resorting to imports of alumina which is not only costly but also involves an outflow of foreign exchange.

Yet on the other hand, the Nalco, which is virtually Vedanta’s next door neighbour, is busy exporting its surplus alumina and not releasing it in the local market. To make matters worse, the Nalco would, in fact, have realised more money had it sold its alumina in the local market. According to sources, the Nalco can easily make another Rs 250 crore annually simply by selling the alumina to domestic consumers like Balco and Vedanta.

Alarm bells are ringing not only for Vedanta but also for Odisha as this is bound to send out adverse signals to other corporates which are planning to invest in the State. The State Government seems to have woken up of late and is initiating steps to ensure that the Karlapat mine is allotted to the Odisha Mining Corporation (OMC). Sources, however, feel that Karlapat’s proximity to the wildlife sanctuary and elephant corridor is likely to make the task of getting the necessary clearances very difficult and time-consuming. Even if all goes as per schedule, it may not be possible to start mining from Karlapat within the next four to five years. By then, it might just become too late!


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