India: Tata Steel withdraws from resisted Bastar project

Tata Steel withdraws from Bastar steel plant project

Times of India - http://timesofindia.indiatimes.com/city/raipur/Tata-Steel-withdraws-from-Bastar-steel-plant-project/articleshow/53893683.cms

Aug 28, 2016

After few years of gridlock over land allocation, protest by locals and mining issues, Tata Steel has finally withdrew from its plan to set up a 5.5 million tonne per annum (MTPA) green field integrated steel plant in tribal Bastar region of Chhattisgarh.

Tata Steel had signed a Memorandum of understanding (MOU) with the state government in June 2005 for setting up a green field steel plant with an investment of about Rs 19,500 crore. '

The state government saw it as an opportunity to generate employment and trigger economic development in the tribal region, but the proposal could not materialize due to multiple factors including problems in land acquisition and even protests from the local people.

Earlier, the MOU was extended for some time and finally it ended in June 2016 and the company did not seek further extension of the memorandum of understanding, official sources said.

Tata Steel's regional head of Chhattisgarh Anand Sinha told TOI that "The Company was allotted 2,500 hectares of iron ore mine in Bailadila deposit No. 4 in 2008 to supply raw material for the proposed steel plant. A prospecting licence was issued to the company that had an estimated reserve of 108 million tonnes of high grade iron ore.

Due to unfavourable law and order situation, we failed to continue the process of drilling in the mines within the time frame as per the agreement. So we lost the mine and had to give up the plan. Government had extended full support to us but the local law and order situation was not favourable", he added.

For setting up the steel plant, Tata steel company had selected a site near Lohandiguda in Bastar district-2000 hectares of land spread across in 10 villages. Since the region had been notified as tribal area, the company could not directly purchase land from the villagers.

Instead, the government was supposed to acquire the land and later allot it to the company. Government acquired the land in Lohandiguda and paid compensation to the villagers by depositing it in their bank accounts, leading to protests against land acquisition.

Meanwhile, official sources said the state government now is not in a position to re-allocate or allot the mine to Tata Steel under the amended Mines and Minerals (Development and Regulation) Act 2015, which stipulates auction as the only mode for mine allocation.