Vedanta Mining: A Political Analysis of Business Problems

Topics: Deer, Supreme Court of the United States, Lobbying Pages: 6 (2159 words) Published: October 31, 2010

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Vedanta Resources: Mining in Niyamgiri Hills
A Non Market Analysis
Rangesh K S, Rasaal Dwivedi and Gaurav Darda

Vedanta Resources is a vast British listed company that is into the business of mining operations. The company has a long history of working in mining and metal processing across the world and specifically in India. In this analysis we focus on the non market troubles that the company has run into while seeking to expand its mining operations in the Niyamgiri hills of Orissa. We start with enunciating the Non market issue of this matter, the profiles, the stand and the strategy of all the interests involved in this issue. We then discuss the non market and market goals of the company tied to this issue, and finally we discuss the strategies that the company could employ in trying to achieve its organizational goals THE ISSUE:

The Vedanta Resources company runs a refinery in lanjigargh area of Orissa for which it sources the raw material – bauxite – from the mines in Jharkhand. The company applied for bauxite mining on top of the Niyamgiri hills which is rich in bauxite.1 The Sterlite Company, owned by Vedanta, along with Orissa Mining Corporation applied transfer of 660 ha of land in rayagad district, which includes the Niyamgiri hills, for purpose of extracting bauxite. This was done way back in 2005. Following this an ‘on-principle’ clearance was given by the Ministry of Environment which later instituted a committee headed by NC Saxena to study the implications of the project for the tribes in the area. The MoE would later rescind its initial ‘in principle’ approval to the project and even reject a second clearance based on the recommendations of the aforesaid committee report thereby effectively stopping the project. The Non Market forces against this project started gaining ground when environmental groups and tribal welfare organizations joined hands to stop the mining the peak of the hills claiming it to be the sacred abode of Niyama Raja, the god of the Kondh tribe of the region, which had cultural and economic significance for the tribal population of that area.2 Amidst this, the Company managed to secure the clearance of the Supreme Court for the project with the latter agreeing to abide by the rehabilitation package suggested by the supreme court in this regard. While the Supreme Court noted that there were some environmental implications from the project, it held that in the larger interest of the social and economic development of the tribes of the region a balance has to be struck between development and tribal cultural protection. In the same judgment it also subjected its clearance for the project on multiple conditions, prominent among which are provision of jobs for the local, creation of a SPV for the development of the tribes of the region and measured and careful mining of the area under the supervision of the forest department of the area.3 Then in 2009, tribal representatives filed a petition with THE NATIONAL ENVIRONMENTAL APPELATE AUTHORITY (NEAA) seeking immediate halt to the project citing environmental degradation and economic slump caused by it. Subsequent to this, when it came to the Ministry of Environmental to issue a second clearance for the project, the ministry strictly went by the recommendations of the Saxena report which found the company guilty of violating a host of laws pertaining to tribal welfare, environmental degradation, encroachment of tribal land and wild life damage.

Following are the findings of the Saxena report:
• More than 1.21 Lakh trees would need to be cleared for mining besides many lakh more shrubs and herbal flora.

• Mining in the PML will destroy the valuable ‘edge effect’ of the grassland forest landscape and adversely affect wildlife in the area.

• The grasses are breeding and fawning ground for Four-Horned Antelope (Tetracerus quadricornis), Barking Deer (Muntiacus muntjac), as well as Spotted...
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