Thursday, September 17, 2009

DARK SECRETS BEHIND ALUMINIUM

Dark secrets behind aluminium

1. Introduction

A GREAT debate is going on now a days in India on extraction of bauxite and use of aluminium. On the one hand tribals , dalits and peasants have stirred up a hornet’s nest against capitalist development projects of the democratic governments. On the other hand the same government is characterizing those unrest as ‘threat’ to democracy and is taking sever repressive methods to quell the opposition . why this unrest? Why aluminium is so precious? Is the government right? What the community wants to speak? There are innumerable questions come due to these conflict of interests. It is true that this attempt of bringing a booklet on aluminium’s dark side is in context of Kashipur, Lanjigada and many other struggle who have opened up this debate because of their resistance to these projects.
The purpose behind writing this booklet is to bring the debate against aluminium to more people and raise a support against more extraction of bauxite as well as more use of aluminium. As we know in this present capitalist society there could be no alternative of smelting aluminium from bauxite in an indigenous way because of lack of technology and its subsequent market. For any further production of aluminium, development of capitalism is essential which is equally oppressive.

On the one hand there are conglomeration of corporates who wants to make profit out of aluminium industry because it is precious. On the other bauxite has specificity that it has water, that is, where ever bauxite there is perennial streams. I saw it in kashipur, Lanjigada, Damanjodi and also in Paikamal area. As we know where is river there is civilization that means civilization ‘grow’ on the bank of the river. So like tribal society emerged on the bank of those streams. There are innumerable numbers of villages of tribals and dalits who reside on the bank of those rivers or streams in which water comes due to bauxite.

Here I have tried to highlight the consequences of mining bauxite without going to its technological side just from a human perspective. I hope I will get comments, their experiences, new ideas, specific plans and programes while reading this booklet. That will also help to carry this debate and struggle forward.

2. MNC’s Monopoly in aluminium sector

Presently few MNCs are ruling the rust in aluminium sector. They are like Alcoa (US), Alcan(Canada), BHP (UK), Kaiser and Reynolds (US), Alusuisse (Switzerland) and Pecheney (France). More recently Pecheney was merged with Alcan.

By 1949, 45% of the world aluminium capacity was under government control, 46% was controlled by these above few companies( with each being in monopoly control of its own industry in France, Canada, Switzerland, UK and US) with remining 9% being in hand of 17 small independent producers. By 2002, because of reform proposals the control of MNCs in above world market has increased from 46% to 70% with reduction of government control.


3. World of Bauxite

Nature must have taken thousands year to form bauxite beneath its earth. This bauxite is found mostly in tropical regions like South America , Africa, Asia and Oceanic countries. These locations are like Jamaica, Brazil, Surinam, Venezuela, Guyana, Guinea, India , China , Australia etc.

More than 100 million tonnes of bauxite mined each year. The major locations of deposit are found in a wide belt around the equator. Bauxite is currently being extracted in Australia (in excess of 40 million tones per year), central and south America ( Jamaica, Brazil , Surinam , Venezuela, Guyana) , Africa ( guinea) , Asia ( India and china) , Russia ,Kazakhistan and Europe ( Greece).

Actually, when A.H Hall in USA with P Herolt invented electrolytic process converting abundant of bauxite into alumina in 1888, he formed Alcoa in 1890 and did a monopoly business in US and outside with its ‘patent for 25 years under US rule’. Before that aluminium was costly in production for this was used as ornaments only. In early twentieth century Alcoa branched off into a Canadian North Aluminium Company Alcan with 100% owned subsidiary of former, just to avoid the strict regulation of US government and to continue ‘unfair trade practices’ outside US. The second world war created environment of rising other MNCs also

When alcoa was formed in late nineteenth century they got Arkansas mines in US for 25years. Due to availability of aluminium from bauxite and its proximity to war weapons (during first world war) world extraction of bauxite rose from 24000 ton per annum in 1908 to 1,20,000tpa in 1915 and then to 2,70,000 in 1917. Now nearly 1250lakh tons of bauxite is extracted at world level.

But when Alkansas mine in US started depleting just after first world war and similar situation happened in Europe (except France) these imperialist countries started searching bauxite in colonial countries. For this Guiyana, Jamaica, Ghana and Surinam were the target. When bauxite was discovered in Jamaica , Alcoa backed by US government monopolized the high- quality deposits. Bauxite was also being supplied almost tax-free to ALCAN from Surinam (another colony of UK) and then into aluminium to UK. Ghana was another supplier of bauxite in among African countries to imperialist countries more particularly to US.

The independence movement in African countries forced the developed countries to search for the alternative. The production of bauxite in Ghana in 1957 was 911973 Mt. and suddenly fell down in 1958 in post independence period to 180480 Mt. This continued another two decades. During this period these African countries gave a heavy price. From toppling Nkrumah from power in Ghana, threatening Manley in Jamaica and murder of Walter Rodney a political activist of Guyana in 1980 was part of the MNCs role in third world countries.

The recent Structural Adjustment Programs in third world countries in direction of World Bank and IMF opened more bauxite mining for developed countries. Philipines, Indonesia and India are examples of new age of mining by MNCs. The aluminium sector which was in strictly under state control in India first time went to relaxation to private sector with Foreign investment mainly from ALcan, Alcoa, Pechiney etc and a new player like BHP Billiton of UK and Australia also.

4. World of aluminium

Aluminium production consists of three process: mining the bauxite, refining the bauxite to alumina and smelting alumina to make aluminium. For producing a ton of aluminium needs two tons of alumina and each ton of alumina needs three tons of bauxite. In the bauxite soil presence of less silica more alumina content is accepted as best in quality. In India in most cases silica presence in 2-3% and alumina is 46-48%. This is why most of the MNCs are making queue to exploit. Another advantage is its cheap labour and low cost of electricity. This is why producing alumina in India is cheaper nearly 25-30% in comparison to any developed country as per the director of Vedanta (UK) limited.

But when one ton of alumina goes out of three tons of bauxite, it leaves two tons of red mud at the refinery plant site. Red mud contains iron oxide, silica, titanium zinc, phosophorous , nickel , vanadium and compound formed by adding lime to refining process. ( more on health and environment chapter).similar case happens when one ton of aluminium goes out of two tons of alumina leaving another ton of red mud at smelter site.
Aluminium production needs more energy. To produce a ton of aluminium a smelter consumes at least 13,500 kilo watt hours . it also produces very high emissions of carbon dioxide : an average of 13.1 tons per ton of aluminium produced.
USE of aluminium is varied. Because of its light weight and heat resistant it is used in electric , infrastructure, transportation sector etc. But most dangerous is its use in for military purposes including for bombs which should attract public attention. Secondly, the way world demand is rising on aluminium , that is in coming years a lot of aluminium will also be exported , its expected production would jump to six-fold but will it be replaced?
Mining is the worst sector for foreign investment since minerals are exhaustible. Once the mineral ore get exhausted the companies will go away leaving the area with no resources rather with pollutants. The MNCs would grow but the people would suffer.


5. Developed countries conspiracy

Samir Amin said “ A long period of technological monopoly enabled these enterprises to acquire hydroelectric facilities and bauxite deposits while increasing their production scale, when their monopoly of technology ended , they found themselves in a position of ecoanomic monopoly, based on increasing returns to scale”. The same thing happened in case of Alcoa who enjoyed 25 years patent as per US laws and total hegemony even after post first world war. But to save it from financial irregularities as well as to continue its clandestine operation Alcan was formed as a subsidiary of Alcoa in 1907. Then Alcoa did its outside business in Europe and Paul Heroult took his smelting process to Switzerland as hydro-power potuntial. This enabled corporates like Pechney, Alusuisse and Kaiser also to grow.

When Arkansas mines in US was finished and European nations faced crisis of bauxite many alumina refineries have moved from the western world to the bauxite mines –specifically for Australia, Brazil, Venejuela and India- found it more economical to convert the bauxite to alumina on site rather than incurring high transport costs- according to Africa resource group. Since then monopoly of technology is the determining factor even today. Other developing countries who opened up their bauxite mining and established the alumina plant were the worst sufferers. The price of bauxite was set by the parent company according to its own internal price situation, unlike the price for aluminium which was set cooperatively by all the producers.

The third world countries have not got yet the selling rights and fixation of price in the international market even though all most all bauxite comes from these companies. It is believed that now National Aluminium Company (NALCO) who got technological support from Pecheney ( France) is exporting its production to the later for selling in the international market. Interestingly more recently Alcan took over Pecheney in its submerger plan and in a way Alcan is enjoying the rights over Nalco’s production. The same Alcan’s subsidiary Indal was operating it alumina refinieries in Belguum (Karnataka) and Muri (Bihar ) and aluminium refinery in Sambalpur district or Orissa. This alcan is coming to Kashipur also.


6. Economic reforms for bauxite mining MNCs

Economic reforms in India created opportunity for growth of mining industry particularly for bauxite industries. The National Mineral Policy 1993 opened up bauxite mining to foreign companies with an investment upto 75% (from 25%). Earlier where public sector companies like Balco, Nalco, Malco were the major players of bauxite extraction and Indal and Hindalco were other players in refinery projects there Alcan, Hydro, Sterlite-Vedanta, Billiton etc have entered into the scene.

India has 2911million tons of bauxite against world deposit of 23200million tons. It is mainly in states like Orissa, Chhattishgarh, Jharkhand and Andhra Pradesh. Orissa only has 70% of total national deposit which is again 13% of world deposit. So in a sense Orissa is more rich in bauxite. This is found mainly in districts like Koraput, Bolangir and Kalahandi district. The present government in Orissa has invited Hindalco (Birla group), Alcan( Canada), Vedanta( UK), BHP Billiton (UK), Rio Tinto(UK) etc. with an investment of nearly 53,000 crores of rupees for extraction of a total deposit of 7330 lakh tons of bauxite deposited in these districts

In 2002, India has surplus of aluminium like its total production was 6.5million tons where as its domestic need was 5.5 mt and only Nalco then was producing 4.2mt(source: survey of Indian industry, 2004 the hindu publications). But most of the new projects except UAIL in Kashipur was signed in the same year.
In Chhattishgarh when Balco was disinvested to Sterlite with 49:51 share holding agreements it was apprehended that under valuation has made. Now CAG report has also vindicated the deal calling it as “big ticket”
Previously, East India Company, Hudson's Bay Company and many American companies chartered themselves as corporations and through these Europe and US’s industrialisation was built on the backs of colonies in Africa, Asia and Latin America. Now Developed countries want to pass their environmental burden to these countries. Japan has reduced its domestic aluminium smelting capacity from 12 lakh tonnes to 1,40,000 tonnes and now imports 90 per cent of its aluminium. US consumes 53 kg of aluminum per head in a year (Indian consumes 300gm ), while it has no bauxite mine.
Firstly the establishment of colony helped the developed countries to siphon off the resources under their condition. Now the structural adjustment programe is helping the same earlier colonial countries to extract bauxite and do alumina rather on more stringent conditions than earlier one.
Many alumina refieneries, in these years, have moved from western world to the bauxite mines –specifically for Australia, Brazil, Venezuela and India- found it more economical to convert the bauxite to alumina on site keeping the patent rights of technology as well as fixation of price in international market in their fold. The developing countries even after so many years of supply of bauxite and refinery plant lacks technological know how. Economic reforms in developing countries under guidance of world bank and IMF has made this extraction easier.
7. Resistance to big projects :
7.1 Kashipur : Utkal Alumina International Limited (UAIL) is a joint venture of Indian company Hindalco (55% shareholdings) and Canadian company Alcan (45% shareholding). Previously, TATA, Hydro (Norwegian company) and ALCOA (US company) were also a part of this project. These companies later withdrew in face of popular protests. The total cost of the project is estimated at 4,500 crores. 198.4 million tonne bauxite would be sourced through open cast mining from Baplimali of Maikanch Panchayat. Alumina would be extracted from the mineral in the alumina plant near Kucheipadar. It is a 100% export oriented joint venture Alumina Consortium. Besides under the project annually 8 million tonnes of bauxite would be extracted. Simple calculation suggests that within 24 to 25 years the entire hillock of Baplamali would be reduced to a flattened base, its very existence would be beyond recognition.
On the other hand UAIL company report says that more than 1500 persons would gain employment under this project. It further says that most of the recruitment would require personnel with technical, project specific skills. In this regard, Chief Managing Director of UAIL Sri SP Sawanta said addressing a government seminar (organised by UNDP), "the kind of people company requires would not be found in Kashipur. The non-technical staff recruitment would be made of 400 persons".
Acording to news reports from the company, the employment, in this case would be given to the evictees that include 147 families from the 3 villages of Kendukhunti, Ramibeda and Talakarol. UAIL is refraining from reaching an agreement with the potential evictees families even. It implies that 24 more villages that would lose their land owning to this proposed project would not get any employment opportunity.
It is certain that directly or indirectly nearly 22,000 people from 82 villages would be affected due to this project. According to PSSP (who is spearheading the movement) sources by this project nearly 2500 people around proposed plant site would be affected and for Baphlimali hill where bauxite mining take place would affect another 42 villages of three grampanchayats ( Kodipari, Maikanch and Chandragiri GP). But one reports collates the estimates of project affected people from various sources : 750 which is the company Norsok Hydro’s estimates, 3500 which is UAIL estimates and 60,000 which is estimated by the Norwegian Agency for Development Corporation speaks.
After UAIL (who would supply its all production to Alcoa of US), Vedanta – sterlite company who has direct negotiation with Alcoa speak in its project report that this mine in Niyamgiri , in Lanjigada of Kalahandi district,would continue for only 25 years. Larson and Tubro with Arab Aluminium Company was invited to invest 10,000 crores of money in another side of Kashipur. They will mine bauxite from Srunger area and will have alumina plant at Sikarpai area in Kashipur block. Next, in Laxmipur block in Koraput district (very near to Kucheipadar area) Hindalco- Birla company would invest 10,000 crores to mine bauxite from Kodinga mali, will establish alumina plant at Kansariguda, and will collect water from Barigaon area.
The same Birla Company will mine bauxite from Deomali area of Similiguda block of Koraput district. And after 30 – 40 years bauxite will be finished up and all of them will leave the area. But they will leave a number of dry streams, dry rivers, chemical red mud ponds and ash ponds. It will make the entire area poisonous. It is due to the bauxite that the local streams originating from the hills are perennial such as the the rivers Indravati, Bansadhara and Nagabali. Due to this, people in these areas get water round the year and it helps them in cultivation. This will go away from them.
Struggle against UAIL was started when people came to know about the project. People in the area physically were obstructing any construction work of the company and for which it could not able to start its work. More recently situation has been changed a lot. Kucheipadar, a small area in Kashipur block of Rayagada district came under terror by the state government in 2005. During the period the police fired blanks thrice; tear gas shelling, lathi-charge, random detaining of people from roads, weekly markets, river bank, and even their own farming land by local police were rampant. Fifty two people were arrested that year in and around Kucheipadar. The C.R.P.F., Indian Reserve Battalion, Orissa State Armed Police were all used to repress the people. The repression continues even today. This is a continuation of the repressive state actions of 16th December, 2000 when three adivasis from the region lost their lives to police firing.
Several human rights organizations including national tribal commissioner condemned such inhuman activities for a private project. The Interim report of the house committee on environment of the Orissa Assembly, 2005-2006 visited the area in September,2005 presented to the assembly on the 5th April, 2006 has highlighted some of the gray areas. As per the report ‘the environmental clearance of UAIL has expired in 2000. They have not received a renewal of the environmental clearance from the MOEF, GOI’. But even after UAIL is determined to start its work and has occupied a portion of land already

UAIL proposes to manage dry red mud and ash pond stacking them in large open ponds.this was cause nearly 150tonnes of sodium hydroxide to be leaked in the soil every day. This in turn would raise the PH level of soil in the region much beyond acceptable limit leading to sever environmental damage.

According to UAIL officials 17 0000 cubic litres of water needed daily for mining and processing. UAIL only has access to two streams the Sana nala for its water requirements and the Bada nala for its affluents discharge. Will it be sufficient ? what will happen to local people?
The power requirement of 80mw will require 2800-3000 tonnes of coal per day. This is expected to generate 900- 1000 tons of ash per day. The captive thermal power plant will produce waste in the form of ash to be disposed of in an ash pond located 4.5 km from the refinery. Ash ponds of thermal power plants are notorious for the pollution they generate. The promise to keep the pond wet is rarely kept as firmly as it is made and how many and which villages will be affected depend on wind direction and force. In fact, UAIL had request-ed that it be allowed to store the red mud and ash in dry form, rather than liquid form, which it argued was a more environmentally sound method; however, its request was rejected by the Ministry of Environment and Forest. In addition, the storage area for lime is very close to a stream, which increases the risk of contamination.

Finally, there is understandable concern that the 20 km of land allocated for the disposal of wastes is not even close to sufficient to store the amount that will be generated by the project. Dr. R.C. Das, Chairman of the OSPCB stated in a 1996 report that, "for any alumina refinery or substantial expansion of existing refinery, red mud will be allowed to be disposed in dry\semi solid form and minimum land of 200 hectors per million tons per annum of alumina produced must be made available." If UAIL is to comply with these guidelines, then 20 km falls far short of this minimum. UAIL has also not put forth a plan for waste disposal if the allocated waste disposal areas reach capacity, as they surely will. This has led to suspicions that they will resort to the unethical and dangerous. If this happens then this would drastically alter the pH balance of the soil, and result in a significant decrease in vegetative growth and land productivity. Formerly fertile lands that sustained local communities would become agriculturally unviable. And also this would damage the ecosystem of the area causing widespread devastation in the area.

According to the environmental clearance given by the government the company does not have to take care of overburden dumping for the past five years. It is expected that the overburden will be dumped on the slopes of the mined area leading to siltation of streams, damage of slopes and cultivable lands.
7.2 Vedanta in Lanjigada
Today Vedanta of UK in Lanjigada of Kalahandi district is the major player apart from UAIL. Vedanta is interested to invest 4500 crores in extracting bauxite and setting up of alumina plant in Lanjigada area. The Ministry of Environment and Forest of Government of India , in its letter dated 22/09/2004, has given environmental clearance to the 1.0 MTPA Alumina refinery and 75 MW Captive power plant of M/S Sterlite Industries (India) Ltd at Lanjigarh. The company is mobilizing fund through London Stock Exchange in name of Vedanta. Also Mauritian firm Twinstar Holdings plan to increase stake in Sterlite company violating its agreement with Government of India in case of transfer of BALCO. For plant 1789.54 hectares of land is required out of which 1109.41 hectares private land. It would employ 250 people directly and 500 people indirectly according to its project report. Because of plant it would displace nearly 60 families of two villages and would affect 302 families of 12 villages of two panchayats.

It would mine bauxite from Niyamgiri hill. The hill has 7.3 crores of tons of bauxite. The company agrees that the project would last for only 23 years. Niyamgiri hill range stretches up to 1073.4 hectares of 508.638 hectares are reserved forest area. The company project report speaks that mining would take place in the reserved forest area also. Because of intervention of Central Empowered Committee constituted by Supreme Court the mining lease to Vedanta- Sterlite has not yet given
According to the reports furnished by Vedanta Company of Sterlite only 750 persons will get employment. However, the project would affect more than a lakh people whose subsistence is crucially based on the Niyamgini, Nagavali and Bansadhara rivers. In company's parlance, the community's depending on forests and rivers for their survival are not even the least affected. To the extent, it maintains that those who lose their trees are also not affected.
The Central Empowered Committee's (CEC) report (constituted by Supreme Court ) on
Vedanta/Sterlite's bauxite-mining project in Niyamgiri hill in Lanjigarh broadly outlined its potential harmful effects. The finding of the CEC's report has weight and relevance for the UAIL project. The alumina plant and the mining project linked with it will have serious adverse effect on the flora and fauna due to mining, overburden dumping, construction of proposed road through the dense forests, liquid and gaseous effluents emissions, bright illumination, blasting with explosives, drilling and resultant vibration and dust, operation of heavy loading and unloading equipment, pollution, etc.

More recently in Lanjigada of Kalahandi district 34 tribals were arrested in April 2006 because they opposed forceful occupation of their land by Vedanta Alumina Company of UK. They were demanding either land or job against their land. Despite three adivasis having been killed by private security officials and drivers of Vedanta company in separate incidents over two years, no murder case has been registered by the local Lanjigada police station. In 2002 nearly 19 activists were arrested in a false case because they were opposing Vedanta.
FROM January 23 to January 31 2004 60 families of two villages Kinari and Borebhata and 8 families of Sindhibahali were evicted forcibly and their houses were bulldozed by sterlite.
7.3 Gandhamardan: Gandhamardan mines is situated in Paikamal area in newly Baragada district. In 1971 the government of India officially announced the existence of bauxite deposits in Gandhamardan and newly formed Bharat Aluminium Compnay (BALCO) a government undertaking got the mining lease in 1981. After four years that is on 1985 Balco started its work creating infrastructure facilities for mining. Balco has in mind to supply bauxite from Gandhamardan to its Korba ALuminium complex.
Gandhamardan hill range forms part of a rich evergreen forest. It is famous for medicinal plants, for two temples ; Harishankar and Nrushinghnath. Around the hill several streams are there including three major streams like Kapildhara, Khandiharan and Durgei Jharan are part of the local lifes. When mines was started it affected those streams and that sparked voice against the project. Capacity of the mali is 213million tons.
In 1986 people started opposing the project and during a year or 987 people including 479 women and 51 children have been arrested as per PUDR report. Later due to resistance Balco was forced to leave Gandhamardan. But now Nalco another public sector company is interested to take over the mining and against it struggle has been started.

8. Tips of the ice berg
8.1 Experience of Nalco:
The National Aluminium company limited is an integrated multi-locational aluminium company incorporated in 1981 as a public sector company to exploit bauxite from Panchputmali of Koraput district in Orissa with a capacity of 4.8mtpa to last for 75 years to finish entire deposit of 370million tons the hill has. The capital then was Rs.1300 crores. Technical know-how and basic engineering for the project were supplied by M/s ALuminium Pecheney of France with an agreement to supply more than half of its aluminium to the above company.
Nalco has two units; one is refinery plant at Damanjodi and another is aluminium smelter at Angul. A fully mechanized open cast bauxite mine has been operating since 1985. Nalco produced 28,22,464tonnes of bauxite ore during 1999-00. It produced 8,86,000tonnes of alumina powder during same year and out of which 4,79,620tonnes were exported. Nalco is very soon going for second expansion upto 15,75,000tonnes per annum for which wants to occupy Gandhamardan mines of Baragada district because presently panchputmali would be sort. The plant has a captive power plant with a capacity of 55.5MW now for which coal is supplied from Dhenkanal district of Orissa. To set up the mines and refinery complex , the company had acquired 7419.8 acres of land ,out of which 4352 acres were private lands. A total of only Rs. 1,48,73,474.52 were paid as compensation for patta land alone at a rate of Rs. 2000 per acre and Rs. 150 for each tree.
The Nalco operations in Damanjodi and Panchputmali hill have affected directly 26 villages and more than 690 villages indirectly. The project displaced 597 families ; 254 were adivasis, 56 dalits affecting nearly 5000 people. In 1995 after 10years of mining several villages around panchputmali like Bhitara Jholamuha are getting notice from the company to evacuate because of siltation.
Waste water is released into Kolab river by a drain passing through 9vilalges. Villages downstream to the plant have been severly affected by the pollution of plant effluents in the river and streams. Even though Nalco factory has an ash pond and red-mud pond, effluents are being discharged into the river regularly, causing cattle deaths and crop loss.
People compalained on a personal visit to the area in 2002 said that of 300 acres of cultivable land is affected due to the effluent discharge causing drop in harvest. Germination problem of miles, ginger and tumeric is perceived in the same year. Cattle and goat are dying of dysentery.
Out of 597 families displaced 441 of them have been rehabilitated in the Analabadi colony , for which Analabadi villages were deprived of their land. 156 more houses were built, 352 of these families have been given one job each viz. 35 dalits, 149 adivasis and 168 other casts. Eight of the employees were women.
When Nalco was started people had accepted their offer easily since they were promised jobs and good relocation, including money for their land. Joint families got 10’x6’houses with no facilities and no land. The people of Kalahandi, Lanjigada had been brought to the NALCO by Sterlite bauxite mining company in 2002 for a visit. Bhima Majhi of Niyamgiri Surakshya Samiti, Lanjigada, said the houses given by NALCO are suitable for pigs to stay not for human beings. Raily Gouda, an oustee who had a job in NALCO, Orissa, said to the people of Lanjigada, "It is the fault of our father and forefather who agreed to leave our land. Otherwise if it had been today we would not have left our land". Before Nalco , as per 1981 census 60% of the population there were adivasis. After Nalco less than 12% of the adivasis people remained (in Damanjodi area as per 2001 census) since most had to move out mostly to Nabarangpur district and adjacent Andhra Pradesh for other vocations.
WHEN the decision was taken to displace the people there was no definite commitment either to resettle them in a humanly acceptable manner or make them share in at least a few benefits of the project in the form of jobs and contracts. It was found that the people who have depended on forest for centuries are deprived of the sources of their livelihood with no alternative means of survival. In most cases compensation was low and it was inadequate for them to begin a new life. Particularly the landless mostly dalits lose their livelihood but are not entitled to compensation because land does not belong to them. Later Nalco did plantation of thousand of trees in community land under its environmental regeneration scheme but it is again the property of a few individuals or of the state. landless dalits are thus deprived of the infrastructure that was sustaining them
Later many men try to cope with the tension and disruption caused by displacement and a new economy grew up in the area. Modernization and cultural change imposed from outside did greater deterioration of the status of women. Wife beating , gambling which was rare in tribal society has become common site. Literacy is low in among tribals, dalits as well as women. A personal visit to the area in 2002 saw 66 widow whose husband were in job are managing their food working as made in others houses. Nalco is not interested to give job twice and these people left no land with them.
In NALCO open cast mining is changing nature water cycles by soil compressing and breaking up of top soil. Large scale removal of vegetation has a negative impact on the fragile eco system. This would lead to increased erosion and long lasting impact on local water resources.
Now the workers of NALCO have again come to the streets to protest against the privatisation plan of the government of India. The oustees who got jobs would be the first victims after privatisation because they still enjoy the lowest ranks in the company. The government proposes to reduce its holding in the 2,30,000 tons capacity Nalco to 26% from the current 87.15 % . it had earlier divested 12% of equity.
9. Will they bring development : True history of few corporates
9.1 Alcan is more recently part of Utkal Alumina Internaitonal limited with 45% share holding with another Hindalco with 55% in Kashipur Orissa. Since the MOU has been signed in 1993 Orissa government all the time has been saying that Alcan with Hindalco will bring development to starvation death prone Kashipur as well as Poor state Orissa. In this perspective it is essential to look into the past record of Alcan on which a democratic welfarist government relies more bringning in development.
Alcan was earlier a subsidiary of Alcoa which was formed in 1907 and became independent from later in 1928. The history speaks that Alcoa of US initially engaged with so much fraudulent activities that to avoid from US laws it went for division into ALcan into a Canadian company. The intention was also “to take advantage of that country’s cheap hydro-power potential.
Since then alcan is operating in 56 countries with an workforce of 73,000. In 1960’s it also tied up with Indal to establish aluminum smelter at Sambalpur, in Orissa.
Alcoa earlier after formation of Alcan, exerted pressure during first world war period on US government to threaten Britain with the cutting off much needed munition supplies unless leases taken up by Alcan in British Guinea (a caribbian country colony of UK) is approved. By this Alcan started its work and in 1928 it became independent. UK government tied up its aluminium requirement to be supplied from Alcan and production of Alcan shoot up and it emerged as second largest aluminium supplier after Alcoa with lowest operating cost, given cheap hydro power and cheap bauxite from British Guinea.
COMPANIES LIKE ALCAN are always looking for ways to avoid paying taxes. One way to do this is to incorporate subsidiaries inside countries where the company pays little or no taxes. Countries like this (LIKE INDIA) are known as ‘tax havens’. India is exempting income tax to any 100% export oriented projects and UAIL would be exempted from any type of income tax. By this hindalco (India) will not pay any tax so also alcan will not. But alcan will easily offshore its profit from India. And India will get zero income tax.
Leo-Paul Lauzon, who recently published a study on Alcan’s tax payment history, says that over 200 Alcan subsidiaries are incorporated in tax havens. He says that by incorporating subsidiaries in tax-havens Alcan is transferring its profits offshore where the company does not have to pay income taxes. If Alcan incorporates a subsidiary in a foreign country with little or no income taxes, the subsidiary does not have to pay taxes. Alcan is therefore legally allowed to become incorporated in a low-tax country and avoid paying taxes on foreign income. In a recent study Lauzon found that Alcan paid no income tax between 1999 and 2003. Instead, he says that the company received $140 million in income tax returns. In among it 200 subsidiaries in several countries world over in India alcan have two subisidaries like Utkal Alumina international limited (Kashipur) and Pechney alumina resources India private limited ( with now Hindalco again in Renukut, UP).
9.1.2 Alcan and weapon industry :

In 2004 Alcan’s Engineered Products Business group Aerospace business unit generated $1.15 billion in operating revenue. Sixteen percent of this total came from sales to customers in the military and space industries. This financial data is not insignificant, and given that Alcan claims to be a “key supplier to both European and North American military markets”, it is clear that the company is involved in the arms trade. Through a company acquired in 2003, Baltek, Alcan is supplying some of the world’s largest builders of military equipment. Some of Baltek’s main customers include:

Northrop Grumman – In 2004 Northrop Grumman selected Alcan-Baltek’s structural foam core material for use on its Multirole Electronically Scanned Array (MESA) radar. The radar is mounted on top of a Boeing 737 aircraft and is designed for Airborne Early Warning & Control (AEW&C).

Boeing – Alcan-Baltek’s lightweight balsa compound is used in the engine intake of Boeing's proposed X32 fighter jet.

Lockheed Martin – Alcan-Baltek supplies Lockheed Martin with structural foam core material for use in the construction of NASA’s next generation space shuttle. Alcan’s involvement with the arms industry is in contradiction of their image as a sustainable andcaring corporation.

9.1.3 Environmental track record :

Alcan has put an enormous amount of money and energy into constructing its image as an environmentally responsible, sustainable and green corporation. It has published sustainable development reports listing its philanthropic and environmental actions around the world. Through its affiliation with large international institutions, such as the United Nations Global Compact and the World Business Council for Sustainable Development, Alcan has been able to further paint its operations as environmentally friendly and socially responsible.

Alcan’s recent focus on sustainable development and Corporate Social Responsibility is a response to greater scrutiny of multinational corporations by civil society groups around the world. While Alcan has been able to position itself as a ‘leader’ in sustainability its operations around the world continue to be environmentally damaging.

Alcan operates huge smelters and refineries that release dangerous chemicals into the environment, their operations require incredible amounts of electricity from destructive hydro electric dams, and their bauxite mines employ the most damaging form of mining: strip mining. In addition, Alcan plans to expand its operations in the South where environmental regulations may be less stringent. Regardless of Alcan’s effort to convince the world that they are environmentally and socially responsible, they are a part of a very destructive industry. Apart from Alcan’s environmental impacts mentioned in the section above, other examples of the company’s track record are included below.

9.1.4 Toxic Pollution

Alcan’s Vaudreuil bauxite refining operation in Jonquière Quebec released 10,163,062 kg of toxins in 2001. This included more than 10 million kg of calcium fluoride to an onsite landfill. Calcium fluoride can irritate lungs and cause bone changes (referred to as skeletal fluorosis). The plant also released 3,236kg of benzo(a)pyrene to the landfill, a chemical known for causing cancer. In 2003 the Vaudreuil bauxite project was listed as the largest discharger of toxic chemicals by Environment Canada (as defined under the Canadian Environmental Protection Act).

In response to Alcan’s dumping of toxins Paul Muldoon, Executive Director of the Canadian Environmental Law Association said: “I take little comfort when I hear that dangerous chemicals are being buried in landfills. Sooner or later landfills leak, and people and the environment are exposed to contaminants”. Alcan’s Shawinigan factory, where the company produces aluminum cables, is Canada’s third largest source of toxic pollution. Between 1995 and 2001 the factory released 1 916 404 kg of calcium fluoride, most to an off-site landfill, 65,142 kg of hydrogen fluoride to air, and 4 929 kg of cancer-causing benzo(a)pyrene to the air”.
9.1.5 Alcan in Jamaica
Alcan opened its mining operations in Jamaica in 1953 and sold out to the private Swiss company Glencore in 2001. About one-third of Jamaica’s bauxite refining capacity changed hands during the transaction.

Prior to its acquisition of Switzerland’s Alusuisse in 2000 Alcan had plans to double the output of one of its Jamaican refineries. The purchase of the Swiss company, however, gave Alcan more bauxite and alumina than it needed. In 2001 a report on land use and forest cover determined that bauxite mining was the single largest cause of deforestation in Jamaica.

The study stated that the significant degradation of forests and watersheds occurred in mining areas in the parishes of Trelawny, St. Anne, St. Elizabeth, Manchester, Clarendon and St. Catherine. It went on to say that the most affected areas were in the parishes of St. Anne and Manchester. The parish of Manchester is where Alcan’s Kirkvine facilities were located (the site continues to be mined by Glencore and Windalco).

Porto Trombetas: bauxite mine Brazil
Alcan owns 12.5% of Mineracao Rio Do Norte along (MRN) with Alcoa (18.2%, U.S.), BHP Billinton Plc (14.8%, Australia), Companhia Brasileira de Aluminio (10%, Brazil), Companhia Vale do Rio Doce (40%, Brazil) and Norsk Hydro ASA (5%, Norway). MRN operates one of the world’s largest bauxite mines in Porto Trombetas in the State of Para 880 from the city of Belem. The region holds large reserves of bauxite. MRN’s exploitation of these reserves, which began when the mine began operations in 1979, represents one of the worst cases of aggression against the environment in this region of Brazil. Between 1979 and 1989, MRN dumped 24 million tonnes of bauxite waste (tailings) into neighbouring Batata lake. The dumping caused the destruction of a large part of Batata lake’s ecosystem. In some places the layer of bauxite at the bottom of the lake reaches a thickness of 4.5 metres.

On the hand Alcan in these 56 countries has made phenomenal growth in these years and if we go to one year of its profit. It is increase of 303% from 2003 to 2004 ( $64million to 258million ).

9.2 Vedanta :

Sterlite – Vedanta started life as a business delivering copper cables for telecommunication companies in India. From 1988, as IT became the subcontinents millennium mantra, so sterlite supreme opportunist was close behind.

He set a course from which he has never deviated except that , as his greed grew, so did the ambit of his ambitions and the scandals of his stock play. Privatization and foreign control promoted by government of India after 1993 helped sterlite to take except to take export business as primary and grew.

In 2000, agrawal tried to delist his company from Mumbai Stock Exchange then buy back its share at only half the book value. The Indian authorities told Agrawal where he could not go.

Sri Anil Agrawal, MD is perhaps the best example of a homegrown capitalist who later shifted its entire business because he found difficulty in operating its business with all unethical manner.

IN 1998 SEBI condemned Sterlite for insider trading – Praful Bidwai wrote in Frontline “the greatest indictment by any statutory body yet of corporate malfeasuance in the stock market” . sterlite was banned from accessing the market for two years ; another four brokers were found guilty.
Aggrawal had collaborated in the share price rigging with “promoter” called Harshad Mehta . Mehta offered hid dubious services to companies of precarious financial standing including sterlite.

The Indian version of “enron scam” was done by Harshad Mehta with market manipulation by creations artificial market boom and eventual implosion of the investments with help of three Indian companies like BPL, Videocon and Sterlite and barred from accessing capital market for four , three and two years respectfully.
Now Vedanta is ostensibly controlled by Sterlite industries of Anil Agrawal as NRI based in London.
In 2003, sterlite sales rose 14% its export turnover grew three fold (by 201%) , tax provisions tumbled by 84% became the increase in exports enabled the company to benefit from tax breaks on export profits.

The news paper “telegraph” claimed there were documents showing that Balco produced special light weight aluminium alloys used in India’s Prithvi and Agni series of intermediate nuclear missiles and rocket components. Balco allegedly supplied the casings for india’s nuclear test of 1998. The company was “bound by a supply –and- production agreements with the department of defence supplies to keep this technology secret” “the agreement ( s.no. 1(3)/90/T(SI)/CPO (VG)-1645 ) bound the secrecy. Butby selling to sterlite , details of the technology might be leaked to outsiders.

Opposing Balco deal nearly seven thousand workers came to the street in Chhattishgarh and Mr. AM Ansari working president of Bharat aluminium employees union (CITU) was dismissed by sterlite “for bad behaviour”.

9.3 Rio Tinto (RTZ)

RTZ : British company TRZ now controls a one thousand square miles (2590 sq km) mining lease over lands that were once the largest aboriginal reserve in eastern Australia – lnads where aboriginal people still live and were hunting and gathering.

The aboriginal people in the 1990s still hunt and gather on lands adjacent to the mine they still struggle to keep their culture to survive.
Albert charathun a wik tribe said “they never asked us for this land. This is our forefather’s land….we can not give away our land . it is not well for this country to be destrouyed and given away…we are tryng to save this country for our children to help them stand firm and strong”. Mabel Pamulkan “from generation to generation it will be our land. God has given it to us. We thank those that stand behind us for our land.
In January, 1996 the Australian federal court ruled that the wik people retained no native title rights that all their rights to there tribal to their thribal lands had been extinguished when the crown , the Australian authorities awarded mining or pastoral leases to white people. RTZ said “right to land depends on the ability t defend it.”

10. Aluminium and war :

In India , after Iraq war and Afghanistan war a number of bauxite mining and alumina MOUs have been signed with Orissa , Jharkhand, Chhatisgada states. The MNCs are like Alcan, Alcoa, BHP Billiton and its joint partners like Vedanta- Sterlite, Hindalco and L&T.
Since world war one the aluminium companies have felt that their future is very much linked with the war. ‘It was during the first world war that the aluminium companies came to realize that their fortunes were very closely linked to the production of military materials.
It was during the First World War that both Alcoa and Alcan companies came to realize that their fortunes were very closely linked to the production of military materials. US capacity, mainly supplied from Alcan and Alcoa , jumped from 40,000 tons per year (tpy) in 1915 to over 60,000 tpy in 1916. By the time US entered the War in 1917 over 90,000 tpy(tons per year) channeled into the aircraft industry alone. By 1918 the very strong relationship linking the aluminium industry to the arms industry had been well and truly established. Other European countries like German, France, Italy took interest in mining bauxite and establishing smelter plant. This era helped the major aluminium companies like Kaiser, Reynolds (in US), Alcan ( Canada) , Alusuisse and Pecheney ( Europe) to grow. Because UK has no such bauxite mine, it started relying more on Alcan.
“The war itself led to a dramatic expansion of capacity far in excess of normal peace time requirements. In German, in particular ‘the decision to enlarge the aluminium capacity….was part of Prussian military policy of autarchy. World war one brought the German aluminium industry into a significant world position .” The Tariff Commission report on “ war changes in industry series” in US observes the same. Since then the MNCs like Alusuisse and Pecheney, Alcoa and Alcan , Kaiser and Reynolds are ruling the roost in aluminium sector.
But when Alkansas mine in US started depleting just first world war and similar situation happened in Europe (except France) these imperialist countries started searching bauxite in colonial countries. The war situation gave further edge to the monopolistic tendencies inherent in the industry forcing companies to make resource accessibility as wide, and as exclusive, as possible. For this Guiyana, Jamaica, Ghana and Surinam were the target. When bauxite was discovered in Jamaica , within safe distance of the US, Alcoa backed by US government monopolized the high- quality deposits. Bauxite was also being supplied almost tax-free to ALCAN from Surinam (another colony of UK) and then into aluminium to UK. Ghana was another supplier of bauxite in among African countries to imperialist countries more particularly to US. US production of aluminium increased from 146,000 tons in 1939 to 693000 tons in 1944.
Dewey Anderson an US government aluminium expert just after second world war wrote “ Aluminium has become the most important single bulk material of modern warfare…..No war can be carried to a successful conclusion today without using and destroying vast quantities of aluminium …..We must plan the aluminium capacity available to the whole free world of nations strictly in terms of this awful prospect.”

This was during the Korean war, when the military demand for aluminium was soaring. During this period Anderson argued that the US must stockpile much more aluminium for war, particularly for its air-force; that the cost to the US economy and environment was too high to produce more within the country; and that more should be imported from Alcan, which was then constructing a huge new smelther on canada’s west coast.

Aluminium’s “strategic” value to the arms companies –to America’s “permanent war industry” in particularly, which Eisenhower called its “military-industrial complex” – is obviously a key reason that the real costs of producing aluminium are hidden and transferred. Britain too, while closing down most of its manufacturing industries during the Thatcher Era ,kept “aerospace” or “defence” as a cornerstone of its economy, as most lucrative and “strategic” sector. (Harold Wilson pushed for a new generation of smelters in Britain, among then the nuclear – powered smelther at Anglesay in Wales. Those in Scotland are run by ALcan.

One reason for aluminium’s strategic value is thermite , a little known invention at the dawn of the 20th century in 1901 , that virtually defined the violent course of the 20th century. While smelters require huge supplies of electricity in order to split aluminium from its bonding with oxygen in molecules of aluminium powder. When the fuse ignites, the aluminium leaps to the high temperature of its “heat of formation” to rebond with oxygen , making the exploision huge. This was the basis fo the first world war hand grenades, second war incendiary bombs and napalm, and the “daisy cutter” used by American plaes for ‘carpet bombing” from the Korean and Vietnam wars to iraq. Aluminium is also basic technology of nuclear missiles under fusion process.

Now the aluminium can spontaneously combust at the nano scale and could be used in rocket fuel ( Steve Jurnetson, “transcending Moore’s Law with molecular elecronics” Nano technology and business journal Vol 1 No 1).
As per the recent news in Washington post the pentagon has increased its aluminium requirement upto 17% from previous year from the developing countries.
“Guyana’s bauxite was the raw material base for the burgeoning power and position of Alcan …..especially during the period of world war two. Guyana’s bauxite , therefore, contributed markedly to the victory of the Anglo-American power system over the German-Japanese one’’ (source : N.Girvan wrote in his article, “Corporate imperialism : conflict and Expropriation,” published in Monthly review press , new york , 1976). Guyana presents perhaps the best documented example of how these multinational companies have undermined political independence in bauxite rich third world countries and subordinated these countries to the accumulation model of Western industrial capitalism.
Although the aluminium percentage in war-planes has diminished , the complexity of aluminium alloys used has increased, alongside a new range of composite fabrics blending oil or plastics with aluminium. These alloys and composite are crucial for aircraft, missile technology, and satellites, as well as war-ships and tanks. ( Natham Hodge in the Financial times 30 june 2005 “Pentagon studies China’s influence on the price of weapons metals” mentions aluminium with titanium and steel as today’s key weapons metals. Balco supplied aluminium to India’s nuclear weapons programe. (Details of Balco’s deal supplying lightweight aluminium alloys for india’s Agni and Prithvi nuclear missiles were published in the Telegraph on 2/3/2001.). alcan has long supplied to UK weapons industry. Graham gave the percentage of aluminium used in the arms industry at around 30%( 1982 page 250).



11. Aluminium and Environment

Hindalco smelter and refinery are in the IAI ranking of Best safety performances for the year 2000. in additions , Indal’s hirakud smelther has also been recognized by the IAI as one of the best in safety performance Benchmarking during 2000.
But Indalco in Sambalpur of orisa smelter caused widespread fluorosis among local villagers. In 1990, scientists from G.M. College of Sambalpur examined villagers and found that an astounding 67 percent of men and 64 percent of women suffered from fluorosis. People aged 12 to 19 were most severely impacted. The researchers also found that the water and vegetation in the areas were "highly contaminated by fluorides." (U.N. Samal and B.N. Naik, "Dental fluorisis in human beings around an aluminium factory of Orissa," Journal of Environmental Biology, V. 11, No. 4, Oct. 1990)( source : aluminium’ dark side)
As per centre for international environment law report “ a bauxite waste site leaches heavy metals into the soil and ground water and the existing factory emits dust, SO2, NOx , CO and flurides far in excess of plant area and EC air emission standards off side testing reveals high concentration of benzopyrene, arsenic, molybdenum, copper , nickel and chromium. Health problem including congential defects , allergies and thyroid and lung diseases are on the rise through out the region.
The Friguia mining operations in Guinea , according to Norwatch has generated “an enormous red mud deposit, which covers on entire valley.
Redmud residue and caustic soda from the alumina refinery in Yirrkata ( Queensland) was found poisonous to fish.
A study Jonquirre smelter workers in the late 1970s found that 73 workers had bladder cancer , 60% more than was statistically likely. It increased ;upto 130 by 1990.

Also according to International Aluminium institute of the land disturbed each year by bauxite mining 76% is forested, 19% agricultural nd pasture and 2% shrubland. IAI reports “of 1591 hectares mined in 1998 , 80% was wildlife habitat , 175 hectares was tropical rainforest”.

In 1998, villagers petitioned against Alcoa in Surinam that “ our agricultural land and houses have been destroyed without any compensation”. “our river has been polluted so badly that we can no longer use it- turning down it into orange brown colour , health problems have occurred destruction of the forest and pollution of the river has also substantially limited our ability to hunt and fish on our lands.

Nalco aluminium smelter in angul , Orissa is the source of sever fluoride contamination more than 220 tons of fluoride into ground water and surface water according to 1992 tests run by the Orissa state prevention and control of pollution board. Many villages have reported brittle bones, tooth and gum diseases , lumps of dead skin , cattle number decreased from 3000 to 100 in a decade.
An MIT study found that about 1% of global emissison of anthropogenic greenhouse gas emissions by this aluminium industry.
The aluminium production cycly , including mining processing refining and casting , produces about 12 tons of carbon dioxide per ton of aluminium producers.
In 1999 the Australian institute an environmental group reported that shutting down the country’s smelter would be a net economy benefit for Australia. It claimed that subsidies of A$410 million for inexpensive energy and A$ 430 million for “unpaid” green gas emissions outweigh the smelter’s economy contribution. A recent british govt report costs carbon emission at $ 56-225 per ton of CO2. so at an average $ 700 should be added with the cost of aluminium.

Conclusion

Reference:

1. Double Death : aluminium’s links with genocide by felix and samarendra das (unpublished article)
2. mining in Africa : samir amin
3. Gandhamardan mines : a report by PUDR 1986
4. Aluminium industry and third world countries by Graham…
5. ecology debt: by Sanjay Khatua
6. Taru report on UAIL on kashipur
7. Bauxite mining report : IPT report
8. Behind the shining : aluminium’s dark side
9. Great aluminium robbery : Rio Tinto
10. IMPACT OF MINING SECTOR INVESTMENT IN GHANA: A STUDY OF THE TARKWA MINING REGION (A DRAFT REPORT) PREPARED BY Thomas Akabzaa and Abdulai Darimani

2 comments:

Susmita Barua said...

The exloitation and imperialism inherent in globalization by MNC arises out of the injustice built into the centralized privatized structure of banking and financial capitalism with roots in colonial Bank of England and fractional reserve banking. Hope this is studied in each developing countries by conscious citizens.

http://conscious-capitalism.blogspot.com

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