Please find the latest on the Vedanta Niyamgiri case. The SC which has been predisposed to bail out Vedanta (maybe something to do with the SC Justice from Orissa), has more or less, agreed for mining on Niyamgiri. However, CEC, which had been consistently opposing the Niyamgiri mining on environmental grounds, has suggested that the mining (if it is done at all) should be carried out by a SPV where Vedanta/Sterlite have a minority stake. Apparently, the CEC has made the radical suggestion (in this neo-liberal world) that all the profits from mining should be reinvested in tribal development in the two districts - and that the bauxite be sold to *Vedanta at market rates*.
Vedanta which was imagining a windfall from the bauxite mining (Niyamgiri bauxite deposit would be worth at least Rs. 10000-Rs. 15000 crores at current market value - Vedanta would have got this for Rs. 420 crores if one takes the royalty that they would paid) has been shocked by this proposition and according to my sources, walked out in anger from the meeting with Central Empowered Committee. I am sure that they will again try to exercise their leverage within the Supreme Court which has saved their skin till now, inspite of all the legal violations that they have committed. One can wait for the counterattack from Vedanta in the SC. What is interesting to all of us is that when the CEC can come up with this interesting idea of market rate for bauxite - what has stopped the Government of Orissa from doing the same- instead of allowing mining to take place at paltry royalties. Who stops Orissa Government from initiating such SPVs? In many ways, the CEC has capitulated in its principled stand on not allowing mining on Niyamgiri - something we have opposed since beginning and will continue to oppose tooth and nail. CEC capitulation arises from the clear bias that the SC has shown for Vedanta/Sterlite/Agrawal, and the fact that CEC members have been changed. Once the SC provides it permission for mining the arena of the struggle will shift to the ground and political domain. Regards * Vedanta: Yet another twist* * 29 Apr 2008, 0213 hrs IST,Manoj Mitta,TNN* NEW DELHI: In a radical measure for "inclusive growth," the central empowered committee (CEC) has proposed to the Supreme Court that a controversial mining project in Orissa be handed over to a "non-profit company" in which the stake of the Vedanta group would be no more than 24.5%. This is a far cry from the original scheme in which a Vedanta subsidiary, Sterlite Industries, was to set up a joint venture company with a PSU, Orissa Mining Corporation(OMC), to share profits from the bauxite buried in Niyamgiri Hills diverting 672 hectares of forest land. In the non-profit company proposed by CEC as a special purpose vehicle (SPV), the Orissa government would hold 51% stake while the remaining shares would be split equally between OMC and Sterlite. *The change in the nature of the mining company and the reduction of Sterlite to a minority shareholder have been justified in view of the environmental cost for developmental activity in an eco fragile area.* "Where such development is necessary in larger public interest, t*he balance of sustainability lies in balancing the environmental cost with public good and not private profit*," the CEC said, in its 16-page report dated April 24. As a corollary, the profits earned by the SPV would not be distributed as dividends to the shareholders but rather be spent for the benefit of tribals and other local inhabitants of the backward districts of Kalahandi and Rayaguda, where bauxite is due to be mined to supply the ore to a refinery set-up by Vedanta Aluminium Limited at Lanjigarh. If the surplus generated by the SPV were used for the welfare of the local people, it would ensure that disaffection among them was, according to CEC, "minimized if not eliminated." CEC also pointed out the trend of rampant poverty in two mineral-rich and heavily mined districts of Orissa, Keonjhar and Sundergarh, because of the "absence of inclusive growth." Though CEC claims to have formulated its scheme in keeping with "the letter and spirit" of SC's order, the Vedanta group is likely to raise objections. For, the SPV envisaged by SC's order of November was meant only to undertake welfare activities or "rehabilitation package" while the mine as such was to be run by the joint venture company of OMC and the Vedanta group. Another issue that is likely to be contentious is CEC's recommendation that the assured supply of bauxite from the Niyamgiri Hills mine to Vedanta's refinery should be at a transfer price that "*fully reflects the value of the mineral without any direct or indirect subsidy*." In order to ensure that the SPV gets a fair price for its bauxite over the years, CEC came up with the formula of pegging it to the price of aluminium quoted at the London Exchange (LME). It said this was the best measure of the market price of aluminium as even the rate of royalty payable to the government on bauxite is determined on the basis of LME metal price. The CEC's report comes close on the heels of the Norway government's decision to blacklist the Vedanta group allegedly for its environmental and human rights violations at various places in India, including Niyamgiri Hills. The Supreme Court bailed out the Vedanta group on that occasion by suggesting that a subsidiary that did not bear the Vedanta tag could take over the mining project. That is how Sterlite Industries, replacing Vedanta Aluminium in the mining project, filed the application which is the subject matter of CEC's report. http://timesofindia.indiatimes.com/India/Vedanta_Yet_another_twist_/articleshow/2993034.cms -- website: www.freewebs.com/epgorissa
