Bastar division iron_ore_mining_competitiveness

Significance of Bastar Division Iron ore deposit in the elevation of Chhattisgarh economy, physical and social infrastructure…

Social & economic Indicators demanding real and sustained means of growth @ Bastar division …

Bastar Division

Bastar division is an administrative division of Chhattisgarh state in central India. It includes the districts of Bastar, Dantewada, Bijapur, Narayanpur and Kanker. It was created in 1999, when the larger Bastar District was divided into the present-day districts of Bastar, Dantewada, and Kanker. In 2000 the division became part of the newly-created state of Chhattisgarh.

Of states’ 18 districts five fall in bastar division which constitute of 12.09% of total state population.

Bastar Division Population Spread

0

200000

400000

600000

800000

1000000

1200000

1400000

1600000

Kanker Bastar Narayanpur Dantewada Bijapur

Series1

Source: Census 2011

2001 2011

Chhattisgarh No of towns 97 182

No of villages 20308 20126

Bastar Division No of towns 9 24

No of villages 3945 3934

% % of towns in bastar division 9.28 13.19

% of villages in bastar division 19.43 19.55

While the population graph shows of high inequality in population spread, the latter one shows the marginal increase in urban cities and marginal decrease in villages. The most important is where the % of villages would have decreased, the figure has increased. That shows villages have not decreased, rather increased. No country has achieved growth and prosperity through a village-based model of development.

Majority of population survive in villages. The fluctuation in decadal growth rate can be viewed on the sidelines of high mining activity spread heading urbanization. Development in a non developed area is synonymous with physical infrastructure. These physical infra of which steel is an integral one, builds economy by doubling the pace by enthralling investors due to physical infra. However census terms urban area which carries one lakh plus population. Does Bastar know the real mining of Urban world?

Chhattisgarh India

Economic Indicators 2009-10 2009-10

Net domestic product (at factor cost) (Rs. crore) (For State) 63297 4493743

Gross domestic product (at factor cost) (Rs. crores) (For India)

Contribution of Agriculture to NSDP/GDP (%) 18.65 14.62

Contribution of Industry to NSDP/GDP (%) 31.74 20.16

Contribution of services to NSDP/GDP (%) 49.61 65.22

Per capita Net State Domestic Product (factor cost) (Rs.) (State) 25835 33731

Per capita Net National Product (factor cost) (Rs) (India)

NDP Growth rate (%) (State) 12.37 8

GDP Growth rate (%) (India)

Chhattisgarh India

Human Development Indicators 2007-08 2007-08

Human Development Index Value 0.358 0.467

Bastar is one of the

most backward regions of the country. Agriculture which is the key source of survival of major population is mainly practiced for home consumption. Commercial crops are rare. Is the only hope for the improvement is the Political stability and Govt. policy measures at state only or something else? If yes, What ?

Banking on cluster competitiveness is advisable for sustained and harmonized growth. The nature has provided “Bastar” abundant ecology (forest and agriculture plain) and world’s best quality iron ore deposits…

Minerals play a significant and crucial role in the history of mankind. During the 4th century B.C., Kautilya understood the significance of minerals in building a nations' strength. He said, "Minerals are sources of wealth", and armies can be raised on wealth and the king who has wealth and army can conquer the world.

India is the world's fourth-largest steel producer but relative to the size of its economy the

country's steel consumption is low. Economic development pushes steel consumption and Steel consumption push physical infrastructure and further strengthen the economy.

Bastar Division Competitiveness (Dark – High, Light – Low)

Story of Naya Raipur Located about 20 km east of the present capital Raipur, Naya Raipur has been designed on the lines of Malaysia’s hi-tech capital complex at Putrajaya, outside Kuala Lumpur, and is expected to cater to the infrastructural needs of industry and trade in the region. Naya Raipur will have a world-class convention centre, a five-star hotel, an IT SEZ, a gems and jewellery SEZ, a garment park, a theme residential township with an 18-hole golf course, an amusement park, super specialty hospitals, commercial office space, museum, art galleries, entertainment parks, botanical garden, a law university, an education hub, a cultural centre, malls and a sports complex. New state secretariat building is coming in Naya Raipur in 8,000 hectares. (Source: Business-Standard)

Water

Labor (Skilled – low)

Bio diversity

Transportation

Services

Tourism

Agriculture

Infrastructure

Mining

All elements of these which are synonymous with development; demands STEEL. If more

Naya Raipur has to be created it demands more steel. Chhattisgarh has a long way to go on building its infrastructure.

Iron ore deposits of Chhattisgarh lie in ‘Bastar’ province (+65 Fe (hematite) – High Grade) …

Bastar Region (picture depicts) at chhattisgarh is the only source for Iron Ore produce in state. The world’s best quality of iron ore is found in Bailadila deposits of Dantewara district which NMDC had been engaged in extracting. . Important Iron ore occurrences of the State are iron ore (hematite) in Dantewada district, Bailadila deposit in Dantewada district, Chhote Dongar deposit in Kanker district, Rowghat, Chargaon, Metabodeli and Hahaladdi deposits in Rajnandgaon district, Boria Tibbu deposits in Dalli-Rajhara area, Durg district. Bailadila-Rowghat hill ranges in the state are considered to be one of the biggest iron ore fields in India.

Production of iron ore (quantity and value) and domestic consumption 2008-09 Chhattisgarh Production Value Domestic Consumption 29997 59064269 25631 Total 212960 285444020 126223 % of Total 14.09 20.69 20.31 2009-10 Chhattisgarh Production Value Domestic Consumption 26211 44227248 24115 Total 218553 264620052 130822 % of Total 11.99 16.71 18.43 2010-11 Chhattisgarh Production Value Domestic Consumption 29146 82675755 23869 Total 207998 375343429 126814 % of Total 14.01 22.03 18.82

State government economic survey report of 2011-12 says that 80% of population is dependent on Agriculture. Also human development report published in year 2005 talks of poverty and marginalization of population at increasing speed due to of low value productivity in Agriculture. The same is attributed in the Annual plan 2012-13 (presentation before the planning commission) which talks of development challenges and the eminent one is low value agriculture.

So while on the name of biodiversity the deforestation is a hurdle to excavation of natural mining resources the question is what is the measure

for running development and economic harmony for the people of bastar province who had been laid back by years? Poverty, Illiteracy, starvation has already eaten for years and so called “Tendu patta” leaves can how long feed their starving stomach?

Very recently as part of balancing measures - a farm loan proposed by Govt. of Chhattisgarh of worth Rs. 1700 crore and that too with one percent of interest rate for farmers can hardly feed the 45% of Chhattisgarh and 70% of Bastar province tribal population because the land itself has lost its produce and is highly segregated (in pieces).

Worry?

Production of iron ore fines in last three Years

2007-

08 2008-

09 2009-

10 2010-11

(Up to Dec.2010) Chhattisgarh 17965 18925 14960 11431

Total 115396 120560 126915 86431 % of Total 15.57 15.70 11.79 13.23

The gap between domestic demand and availability of steel is met through imports.

Finished steel imports have been consistent to five and half million tones for three-four yrs. What is the need for import when the state can produce more than demand?

Kanker is poor in minerals Iron Ore quartzite and garnet mines are found in region iron and ore deposit have been found in the region of Bhanupratappur. But mining of these minerals have not started till now.

About 1000 Lacks ton Iron and ore deposits are verified in hahaladdi region of the Bhanupratappur Tahasil. The best quality of this Iron and are can be utilized in the over all development of industries in the district. Black and white granite are found in plenty quantity in the district.

Bastar (along with Naraynpur, Dantewada and Kanker) is a tribal

district (70 % are tribal). The total forest area is 7112 sq Kim which is more than 75 % of the total area of the district.

Dantewada is blessed with various mines and minerals. Bailadila contains one of the largest deposits of Iron Ore in the world. The Iron content of the Ore is as high as 68%, which can easily be termed as of world class quality Ore.

Bastar Division accounts for 40000 square kilometers of area which produces 2366 mn tones of iron ore which is 1/5th of iron ore deposits of country. The major area is densely covered by forests and most of these mining reserve lie in forest ranges. Deforestation (ecological policy compliance – MMDR act) and livelihood on forest produce is the key issue for mining .

Bastar Division Iron ore deposits and Reserves

S.No. District Locality Reserves in million

tonnes Grade Fe%

1 Dantewara

Bailadila Deposit No. 1 138 60

2 23 68 3 38 68 4 108 64 5 240 68

6,7, 9, 12 27 65 8 30 64 10 204.65 68

11 200.22 68 13 317.24 65

14 17.42 61

1343.53

2 Bastar

Chhote Dongar Deposit No. 1 0.49 64

2 2.18 65 3 25.44 64-66 4 5.76 64-66

5 1.44 65

35.31

3 Kanker

Rowghat Deposits A 8.06 62.58

B 10.8 50.29 C 55.22 57 D 167 60 E 14.4 52.93

F 476.45 59.62

731.93

Chargaon

Deposit No. 1 18.36 60

2 3.44 60 Metabodeli 15.6 65.6 Hahaladdi 12.82 64

Ari Dongri 26 65

4 Kanker Raoghat 20.174 M.T. 60 to 68

Source: Directorate of Geology and Mining, Chhattisgarh.

However – Integrated Steel manufacturers face Tremendous Challenges…

- Corruption - Stakeholder expectations - Domination and political clout of incumbent players

- Naxalite and outlaw activities - Bureaucracy and slow pace of approvals

? It is estimated that demand of steel will be 220 MT by 2020 and 500 MT by 2050. The requirement of iron ore for domestic consumption alone will be 350 MT by 2020 and 900 MT by 2050. Export quantity will be over and above this. Iron ore resources of India have been estimated to be 23.5 billion tons by Hoda Committee. These targets can only be achieved if setting up of Greenfield steel plants is fast tracked. But how to move forward when concern of stakeholders list is long?

Status of Key Steel Greenfield projects at Chhattisgarh

Production of iron ore in the public and private sector

Sector 2007-08 2008-09 2009-10 2010-11

(Up to Sept) Chhattisgarh Private 154 250 518 128

Public 30844 29747 25959 13904 India Private 146733 148214 159387 68980

Public 66519 64746 59253 27968

Total (India) 213252 212960 218640 96948 % of total @ private 0.10 0.17 0.32 0.19

% of total @ public 46.37 45.94 43.81 49.71 Graph depicts the clear monopoly of public sector units and the non presence of competitive environment for Iron ore produce.

Project Proposed Capacity

Progress Made/ Likely date of commissioning/ Issues on Land Acquisition, Environment / Stay Order

SAIL- Bhilai Steel 7.00 MTPA (3.93 mtpa exists)

December 12 – March 13 (Brownfield expansion)

NMDC – Bastar Steel Plant 3.0 MTPA 90% of the land acquired. Date of completion – 42 months of “Zero date” i.e. receipt of all statutory clearance/approvals and placement of orders for major technological packages. Total land acquired 1,948 acres. 63 acres fell in forest areas.

Tata Steel – Bastar Steel Plant 5.5 MTPA 2044 ha (5070 acres) of land. Land acquisition problem. Capacity to be achieved by FY 2015. Twice renewal of MoU.

Essar Steel – Bastar Steel plant 3.2 MTPA Applied for 608.33 Ha (1509 acres) (Private land – 393.21 Ha & govt. land – 215.15 Ha) Private land passed by the authorities. MoU renewal under consideration.

Visa Steel – Rajgarh 2.5 MTPA Total Land 1020 acres. Approx 270 acres land is in possession & further 750 acres land acquisition is under progress. Environmental clearance accorded by MoEF. Likely date of completion of current capacity under execution – April 2013.

Jindal Steel and Power 3 MTPA Operational. (Brownfield expansion)

Naxalism: A Major Bottleneck of Mining

Half of the Chhattisgarh's 18 districts have come under the category of worst Naxal-infested districts enabling it to be covered under Centre's security-related expenditure (SRE) scheme.

Adequate protection of mining operations and people therein is the sole responsibility of Govt. and people. If it fails to do so the objective of socio-economic harmony can not be met.

However, the steel cluster has a hope that as the economic prosperity takes over the poverty, starvation and unemployment, sooner or later; the people alone would be the guardian of protecting themselves and mining fields from moist operation.. Also needless to say that people engaged in moist operation will also move forward to join the main stream as the means of personal development would have been addressed by the very steel cluster.

• From January to September 2010 there have been 134 encounters between Maoists and security forces in which 160 security personnel have been killed in Chhattisgarh.

• Mines on target of Maoists in Chhattisgarh

• CPI-Maoist cadres have stopped work of 300 roads which were to be constructed under the Pradhan Mantri Gram Sadak Yojana (PMGSY) in the Bastar region

• State's Police department facing shortage of weapons & Police Personnel

• Half of Chhattisgarh's diamond belt in Maoist strongholds

The biggest bottleneck for Government as well as Steel Manufacturers is Land Acquisition. Availability of land records, tribal and forested land, R&R procedures add to acquisition delays: Forest Land: Involvement of multiple state and central government agencies in forest land

acquisition leading to inordinate procedural delay.

Tenancy Land: There are no proper Rights of Records not being available with SGs for

identification of ownership of land, along with lack of support from local administration and local governments.

State government, as the custodian of the mineral resource, has failed to help these investors by expediting their applications on the basis of a fair and transparent implementation of the guidelines outlined in the MMDR Act. State government has continued to sit on the applications for years thus ignoring the development of their people and economy. The point is they can sit based on the positional power they bear but as long as economic viability of the project is there the investor is there, which they should mind for. The very negligence leaves a bad impression on potential investor sentiments and motivation. Chhattisgarh government is vying for potential investment in services sector but has been unable to locate them. Services will only grow when there is skilled labor, infrastructure and government protection.

A matter of concern for Bastar division land

The sale price of Iron ore in India varies between Rs. 2500-3500 per tonne. The cost for mining per tonne of iron ore comes to be around Rs. 500. While this drives the motivation of large players, the betting concern of land acquisition problem for steel plant does not end here…

Company Capacity addition Land Required

NMDC 3.0 MTPA 1948 acres

Tata Steel 5.5 MTPA 5070 acres

Essar steel 3.2 MTPA 1509 acres

Visa Steel 2.5 MTPA 1020 acres

Total 14.2 MTPA 9547 acres

According to above figure obvious info is VISA steel has low land requirement. So considering the base of Visa steel .5 MTPA of steel plant demands 204 acres of land. Based on the same hypothesis the scenario is as follows:

Company Capacity Land Difference (%)

NMDC 3.0 MTPA 408X3 = 1224 acres 70.98

Tata Steel 5.5 MTPA 408X5.5 = 2244 acres 277.06

Essar Steel 3.2 MTPA 408X3.2 = 1305.6 acres 19.94

Visa Steel 2.5 MTPA 408X2.5 = 1020 acres 0

It is two way round. Government itself is not liable for the delay; the delay is because of greed to acquire more land. It’s a serious concern. Isn’t it? A framework is therefore needed to control the mechanism of land which halts other eminent players in expansion, as the motivation thrives among people from one example to another who contimues to protest the steel manufacturers. So if Tata Steel project land acquisition is having a problem because of huge land mass to operate the other player will face the same consequences too, which is obvious now…

Govt. must promote integrated players (steel + mining) above 2 MTPA and cut aside obstructions to achieve social, environmental and economic balance… Iron ore mining in India is only 10 per cent by the big players. The rest is all with the unorganized and small players. The same is in context with steel manufacturers. Sponge iron producers in Chhattisgarh are in large size which gain iron ore from NMDC. The steel makers in the state purchase 3 million tonnes of iron ore per annum from NMDC.

As per State Investment Promotion Board, Chhattisgarh, generally units up to 50 TPD capacity are classified as “Small” (investment below Rs 5 crore) and units up to 100 TPD capacity are classified as “medium” (investment below Rs 10 crore). Based on this criteria 31 units are covered under “small & medium scale” to whom NMDC is supplying iron ore. According to 2009-10 estimates these 31 units consumed 1.99 Lakh tones of iron ore by NMDC. There is no doubt that five and ten crore investment firm will not do efficient conversion of iron ore because of lack of technology and skills required. This results in also huge proportion of air pollution causing environmental degradation. It is not that they are not bothered of but their financial liberty and project viability does not allow for the same.

Details of iron ore supplied by NMDC to these Industries during past three years:

Type Nos. 2007-08 2008-09 2009-10

Small Scale 10 0.31 0.22 0.03

Medium Scale 21 1.83 2.07 1.96

Total (S+M) 31 2.14 2.29 1.99

How beneficial could be these Greenfield projects at ground level?

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Boost agriculture productivity

(financial liberty) and cut Govt expenditure

Environmental balances will be

maintained as part of CSR, balancing socio-

environ harmony

Provide rastructure ads, drinking ter, schools, etc.) as part of

vide strength people to fight st Naxalism to

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tilization of force in mining and steel nufacturing

ce poverty and ribal population inframe further tting Govt.

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The steel production has to increase at a fast rate to keep pace with the GDP growth rate of 9% being projected in the coming years. In order to transform this fledgling steel industry into a flourishing and competitive one, a concerted step aimed at achieving competitiveness is not an option but an urgent need of the hour…

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Produced by:

Nilesh Kumar (New Delhi) [email protected]