Getting the government?s approval for its $9.6 billion acquisition of the majority share in Cairn India could well turn out to be the least of the UK-based Vedanta Resources Plc?s problems. For, two years after the Supreme Court allowed Vedanta to mine bauxite at Niyamgiri forest to feed its alumina plant at Lanjigarh, an expert panel of the ministry of environment and forests (MoEF) has recommended the company not be allowed to mine since this will deprive tribal communities their rights and because, the panel says, Vedanta has violated the forests act in collusion with state government officials. The ball now lies in MoEF minister Jairam Ramesh?s court and he is on record saying he was surprised that the company expanded its refinery capacity without clearance.
While the MoEF?s final decision is expected later this month, land acquisition, especially for mining, has become a serious problem for India Inc. According to a study by the Centre for Science and Environment for six industry groups?steel, aluminium, cement, fertilisers, paper and power?the total land that industry will need in the next two decades will be more than the land it has acquired in the last six decades. These six industries have acquired 0.7 million hectares of land so far for their investments, but will need around 1 million hectares for their proposed investments by 2030. Getting this land, as the Uttar Pradesh farmers? agitation over land acquisition for the Yamuna Expressway shows, is going to be a tough one. The more important issue is where this land is located. Dantewada that accounts for 69% of Chhattisgarh?s iron ore production, has a forest cover of 62% and a tribal population of 79%. How Indian industry is going to acquire this land is anybody?s guess. Some, like Sajjan Jindal, have managed the process well, but a host of projects such as Posco?s are stumbling over this hurdle. To some extent, this is what the proposed Bill giving 26% rights to tribals is trying to address, but reportedly corporate India is opposed to this. Unless it is able to find a way to deal with the rights of local people, it is unlikely Indian industry is going to be able to go ahead with its major projects. A third of its proposed investments, just to cite one number, are in districts affected by Naxalism. Expect more reports of the Vedanta-kind to come up in the months to come.
