Mining projects: solution lies in compensating displaced people

Group of Ministers to clear the new draft Mining Bill

Stopping of mining projects is not the right solution and it is important to adequately compensate people and make them beneficiaries of economic development, , Union Finance Minister Pranab Mukherjee said here on Friday at a coal summit.

Joined the environment versus development debate, Mr. Murkherjee said the solution did not lie in stopping mining projects but in properly compensating people who were displaced. “Answer does not lie in the companies stopping mining activities. Answer lies in providing alternatives to those displaced. We have to see in what form we can compensate them and make them beneficiaries of economic development,'' he remarked.

Mr. Mukherjee's comments gain significance in the backdrop of the recent decision of the Environment Ministry rejecting earlier clearances to Vedanta's Rs.7,000-crore bauxite mining project in Orissa, citing violation of green and tribal norms. The Ministry has also halted the land acquisition process of Korean steel giant Posco's Rs.54,000-crore steel project in the State citing similar violations.

The Vedanta group was in pact with the Orissa Mining Corporation in the last six years to mine bauxite from the State's Niymagiri hills, the abode of Dongria Kondh tribe, to feed its aluminium project. AICC General Secretary Rahul Gandhi has also backed the cause of tribals in the Niyamgiri hills.

A Group of Ministers, headed by Mr. Mukherjee, is considering a new draft Mining Bill which, among other things, proposes to make companies share 26 per cent of their profit from mining with those displaced. “The issue of compensating those displaced is the challenge and we are addressing that issue. The GoM will meet shortly to clear the draft Bill,'' the Finance Minister said.

The profit-sharing proposal has been questioned by the industry on the ground that 26 per cent is too high and is not practical.

Greenfield steel projects of ArcelorMittal and Posco, worth about Rs.1.5 lakh crore, have been delayed for about five years due to tribal protests against land acquisition in Orissa and Jharkhand.

Mr. Mukherjee asked coal companies to make investment in coal washing to realise better returns in the long run.