India clamps down on Maoists to woo mining investors
3 Aug 2010
NEW DELHI: India’s growing Maoist violence is worrying investors, forcing authorities to fight back aggressively in hopes of luring up to $7 billion in funds needed to boost coal and iron ore output vital for growth.
Maoist violence killed 426 people in the period from January to July, up nearly three times from a year ago, the South Asia Terrorism Portal shows, spotlighting the danger of mining in India’s mineral-rich eastern and central states and the challenge to the country’s ability to maintain law and order.
The Maoist rebels say they are fighting for the rights of India’s poor and disenfranchised, and find support among millions of tribal and lower caste people who accuse the state and big firms of neglect and exploitation in regions rich in minerals.
“If this issue is resolved, first of all logistics will improve significantly because trying to transport material has become a big problem,” said Prasad Baji, senior vice-president at Edelweiss Securities in Mumbai, the financial capital.
“Mining operations and production will also improve.” Analysts say India must attract $7 billion in funds by 2013 to develop an additional 100 million tonnes of coal and 50 million tonnes of iron ore to meet estimated demand and maintain economic growth of more than 6 percent over the last two years.
India has reserves of 267 billion tonnes of coal and about 25 billion tonnes of iron ore.
But investors can only be won over by a concerted effort to crush the Maoist threat and speed reform, the government’s twin aims in overhauling a law more than 50 years old that regulates the mining industry.
The changes would affect domestic metal and mining firms such as Sesa Goa, Sterlite Industries, Tata Steel and the Steel Authority of India, and global giants Rio Tinto and BHP Billiton
STAKES OF 26 PCT FOR LOCALS
Several federal ministries are weighing the new bill’s proposals for companies to share more than a quarter of their profit or equity with locals, for foreign investor participation in joint ventures and wide federal powers to tackle lawlessness.
The legal overhaul is part of government moves to expand social programmes for the poor, simultaneously pleasing its core supporters among voters, blocking flows of new recruits to the Maoists and balancing modern lifestyles against traditional ways.
Several government panels will debate the bill, revising it, and perhaps watering down the 26 percent profit-sharing figure, before it goes to parliament early next year prior to becoming law, analysts say.
Containing the Maoists, who were spawned by a peasant revolt in eastern India in 1967, is one of the biggest challenges the government faces and there is no guarantee fresh investments in mining will pay off, many analysts and industry figures agree.
“The eradication of Maoists may take at least two years,” said Edelweiss’s Baji, adding that the well-armed groups were entrenched in forested and hilly terrain, enjoyed the support of locals, and had gained strength over many years.
India’s security forces fanned out against the rebels in March in their biggest deployment in post-independence history, but the army is not being used for fear of alienating locals, leaving ill-trained police forces to fight a guerrilla war.
The government also plans to set up a unified command to coordinate the security offensive against the Maoists and spend more than 9.5 billion rupees to build roads and bridges in strife-torn areas.
But the payoff for the government could be a while in coming.
“Who will go to these areas to work? There is no development, no law and order,” said S. B. S. Chauhan, an advisor at the Federation of Indian Mineral Industries (FIMI) in New Delhi, which groups 400 metal and mining firms.
Slow development of new mines could see India’s coal imports swell nearly 47 percent over the next two years and iron ore supplies fall short of big steel capacities on the drawing board.
India imported about 68 million tones of coal in the year to March 2010, on top of output of 531 million tonnes. Analysts expect coal imports to exceed 100 million by March 2012.
Iron ore production of 226 million tonnes in the year to March 2010 sufficed for domestic use and exports, but more high-grade ores are needed for major steel capacity growth, to the tune of 120 million tonnes, by March 2012.
Annual output at India’s largest iron ore miner, NMDC Ltd fell nearly 16 percent in the year to March 2010 after Maoists cut a slurry pipeline in India’s central state of Chhattisgarh, the worst hit by the revolt.
Market sources said pipeline owner Essar Steel had decided not to repair the link between its plants and NMDC’s mines until the surrounding area was made safe.
NMDC chairman Rana Som said the company planned to build its own slurry pipeline traversing safer areas.
A. K. Sarkar, marketing director of Coal India, said strikes cost 80 days during the year to March 2009 in subsidiary Central Coalfields Ltd, several of them attributable to disruption by the Maoists.
“If the law and order situation is improved, coal production can rise by at least 25 percent,” Coal Minister Sriprakash Jaiswal said in June.
Delays suffered by domestic firms Tata Steel and Essar Steel and leading global steelmakers POSCO and Arcelor Mittal show how tough it is to complete projects in the central and eastern regions, analysts say.
Securing mining leases and negotiating farmers’ protests against land buys have caused POSCO and Arcelor Mittal delays of more than two years in building a total of 37 million tonnes of capacity in eastern India.
“People are scared to come here,” said Ashok Surana, president of the Chhattisgarh Mini Steel Plant Association in Raipur, which has 135 members.
“Such big projects are planned, but the local businessmen don’t know if they can invest in building new hotels because of the Maoists.”
Maoist strike hits road, rail services
August 03, 2010
Road and rail services were badly affected in Jharkhand due to a 48-hour strike called by Maoists that began on Tuesday, officials said. The national highways wore a deserted look and no long-route buses plied in many parts of the state. Life came to standstill in many districts like Gumla,
Latehar, Khuti, Chatra, Palamau and Giridih, among others.
As a precautionary measure, railway authorities cancelled five train services and diverted the routes of six others. Trucks were stranded at many places due to the strike and buses didn’t ply either in many areas.
“We stopped the movement of buses as a precautionary step. There are recent examples of Maoists attacking passengers travelling in buses during a strike period,” said Ramdev Yadav, a travel agent at a Ranchi bus stand.
The pro-Maoist Peoples’ Committee Against Police Atrocities (PCAPA) and its militant wing have called for the 48-hour shutdown in five states, including Jharkhand, to mourn the recent killing of their supreme commander Sidhu Soren in a shootout in West Bengal.
India offers Maoist rebels cash for weapons
August 02. 2010
NEW DELHI // In an attempt to tackle growing Maoist violence, two state governments revealed details yesterday of a weapons-buyback and job-traing program that offers rebels substantial money for their surrender and weapons.
For example, the plan provides a one-time payment of 150,000 rupees (Dh11,920), a monthly stipend of 2,000 rupees for three years and additional future payments to rebels who surrender their bullets, guns, missiles and explosives. They also will receive training as special police officers.
Under the plan, 25,000 rupees is offered for a surrendered machine gun, sniper rifle or rocket-propelled grenade. A surface-to-air missile would fetch an extra 20,000 rupees, an AK-series assault rifle 15,000 rupees, a landmine, improvised explosive device or pistol revolver 3,000 rupees and each kilogram of explosive 1,000 rupees, a West Bengal police statement said.
Zulfiquar Hassan, inspector general of Maoist-infested western range of West Bengal, said that the surrendered guerrillas would be placed in a special camp and provided extra security, so they are not targeted by fellow rebels who might want to punish them.
“We can train and employ the surrendered rebels as [short-term] special police officers. We can also arrange permanent government jobs for some if their performance is that satisfying. We shall also give them vocational training which can help them secure jobs in future… we are even open to negotiations with more attractive offers if some rebels really want to surrender, but do not find our package interesting.”
Manoj Verma, police chief of Maoist-infested West Midnapur district in West Bengal, said that as the Maoists are losing their support in many villages it was the “right time” to introduce the scheme.
Mr Verma said the goverment has received feelers from at least 10 Maoist cadres who are willing to surrender since a broad outline of the plan was revealed last week. “We believe some more rebels will be ready to return to normal life after they know the details of our scheme for surrender on offer,” he said.
“Many Maoists cadres are hiding in forests and remote villages. To distribute our leaflets which are carrying the details of our scheme in different languages, we may use helicopter.”
Neyaz Ahmed, police chief of Maoist-troubled neighbouring Jharkhand state, said yesterday that two Maoists, impressed with the government-offered rehabilitation package, had surrendered.
Rajdeo Yadav, a Maoist commander who surrendered in Jharkhand, told police that he left his group because he did not agree with the Maoists’ way of solving problems of the society, Mr Ahmed said.
“Another girl cadre said she left her group because she was disenchanted with the Maoists’ violent lifestyle and many other young cadres too were planning to surrender,” said Mr Ahmed, referring to 18-year-old Lalmuni who ran away from a Maoist women’s armed guerilla squad in Jharkhand last week.
“Many Maoists cadres are disillusioned with their movement. They want to leave the path of violence and want to join their democratic mainstream,” he said.
Communist Party of India [Maoist] West Bengal State Committee member Akash, who uses one name, said yesterday in a statement that the government would not be able to “buy-out oppressed and protesting masses” and would not be able to solve the crisis in the region.
“The government is trying to lure away our comrades with money. But our party workers are driven by a high level of dedication. They will all reject such surrender and rehab offers outright. No true Maoist can fall prey to such mean temptations,” said Akash.
Landmines recovered in Orissa, 6 Maoists held
Bhubaneswar, Aug 3: Two unexploded landmines were found in Sundergarh district of Orissa.
According to the police, the landmines were found fitted under two separate culverts during a combing operation by the police on Tuesday, Aug 3.
Six Maoist guerrillas were also arrested and they would be produced in a local court on Tuesday, Aug 3, Superintendent of Police Diptesh Patnaik said.
The rebels were held from Kalta area of the Maoist-infested Bonai sub-division, about 450 km from Bhubaneswar.
“Maoists planted landmines under two separate culverts to trigger blasts, thankfully we recovered the landmines,” Diptesh Patnaik said.
“They were involved in several crimes, including the murder of trade union leader Thomas Munda in Jan 2010,” Patnaik added.