Mines reservation & Odisha’s bargain – Charudatta Panigrahi

As expected, the  metal industry investors are now clamouring for guarantee from the state for regular supply of their raw materials. This makes business sense but the intention, unilateral. The tone of such a recent demand was somewhat ‘jarring’. They claim that their presence in the state has contributed to the development of the people and hence the state should guarantee unhindered flow of raw materials. In short, they should be handed over the mines.

The deal must be a win-win.

The corporates have made investments following their own board decisions. They have come to Odisha because they see opportunities to increase their profitability and scale up their growth. When the reservation of the mines is discussed across the table in Bhubaneswar, the state should draw up a detailed account of the dividends the people of Odisha have received because of the investments.

Negotiations have to be in the interest of the state, as the natural resources on which is based the growth story of future Odisha are irreplaceable or un-replenishable. This is the biggest gamble for the State. The investments are queuing up because Odisha is rich below the soil. Without our minerals, we can’t aim at a $1 trillion economy. I have written earlier about this.

Almost 25% of the country’s iron and manganese ore resources will be up for sale for captive users and merchant miners. By doing so Odisha, the projected steel capital of India would be the principal provider to India’s targeted 300mt steel capacity by 2030. Odisha’s mines have a direct influence on the economy of India and world trade. India, the world's second-largest steel producer is now a net importer. If we deal smartly and business-like, Odisha would never be the same again. I foresee our State to be a global destination.

If the corporates claim that with their investments, they have been able to increase local employment then that should be ratified by the local labour office and the Collector. The District Collector should be a part of the discussions with the corporates regarding the reservation of mines. The local civil society is an important stakeholder. It is the primary stakeholder. But are they ever party to such life-altering decisions or discussions? The gram sabhas should be discussing about the reservation of mines. Mines belong to the ‘custodian communities’. How can a few on the high stools in Bhubaneswar or Delhi decide on the largesse to the corporates?

If the corporates are given the mines, can we ensure, with a bond, that they would be responsible for the development of the district or the state or the PHCs of the district or the colleges of the district or the NACs? Can we fix responsibilities with timelines and checkpoints? CSR programs, so far, have been glorious on paper, barring a few. If at all, only one-third of the state is benefitting inequitably from CSR. The activities are not planned as per any developmental needs assessment. They are random and are often implemented as knee jerk sops to propitiate irate local communities. This spoil and skews the ethos of the communities too and their aspirations.

Investment in the state and concomitant creation of employment should not be viewed as any form of ‘generosity’ by the corporates. Their investments in Odisha has given tremendous boost to their market capitalisation. Many have, overnight become Indian multinationals by dint of their Odisha operations. Odisha has given them their identity.

If their investments have yielded employment, then the numbers should speak. “Employment of thousands” is a pompous statement. The local household incomes must have had grown manifold, if they have employed ‘thousands’. Do we have the data? Who have done the surveys? Can we have assessments by independent state based agencies?

We understand the need for supply assurances by the state for such mega projects. Pragmatically speaking, the investments would go awry if the supply is interrupted. So, their proposal for reservations of mines is prudent and expected. But not with any perspective of ‘extortion’ from the state. In a rental economy, the proposal should be equally rewarding to both the parties – the investor and the state. In a few decades from now, when the resources are exhausted, what do we do? Our communities are the primary stakeholders and they should invest in gilt edge securities. Where is our security?

Mining royalty is the biggest non-tax contributor to the state's revenue stream pegged at Rs 6130.97 crore from production of 270.84 million tonnes (mt) and supply of 287.80 mt minerals in 2017-18. With the opening of the mines, the mining revenue is estimated to cross Rs 12,000 crore, 2021 onwards. Education and agriculture term loans have the highest NPAs in the state. With the revenue from mining, the state should look at building parallel resources as standby. In about 5 decades from now all our reserves would be depleted and we would be an empty drum, ravaged and dumped. All the mineral-rich districts of the state featured in the list of most backward districts of the country. In Keonjhar, the epicentre of mining , 62 per cent of the population lives below poverty line. In Koraput, Asia’s bauxite capital, 79 per cent live below poverty line. The income from mineral extraction has not benefitted the regions from where the minerals are removed. Rather poverty has increased in many of these districts and has majorly affected the social fabric owing to quick gains due to the ‘middlemen’ syndrome.

If business looks for quid pro quo, so does the public.

All of us, please let’s not fritter away our natural wealth. If we are indifferent, lackadaisical and ignorant, we would be even much poorer and deprived than now.

Please negotiate evidence based, hard and data centric. Our intention is to provide enabling environment to business and not create stumbling blocks. But in the same vein, not to be cuckold.

Let’s do real business.

Charudatta Panigrahi

Be the first to comment

Leave a Reply

Your email address will not be published.