All miners do not harm tribal people

PC Gupta

A lot is being written about the controversy surrounding a joint venture bauxite mining project of Sterlite (a Vedanta group company) and the Orissa government. Replace Vedanta with any other mining company, take away bauxite and swap it with coal or iron ore or limestone, the story is the same.

It is not about Vedanta versus tribals, it is basically against mining projects in tribal areas. People have poor perception of the mining industry and rightly so when you look at the damage done to the environment by small scale miners in areas like Bellary-Hospet in Karnataka or Barbil-Barajamda belt in Orissa/Jharkhand. These small scale unorganised miners have brought a bad name for the mining industry. However, there is a bright side to the mining industry too. Unfortunately, immense benefits that have accrued to local people from mining projects like Bailadila of NMDC in Bastar or Damanjodi bauxite project of Nalco in Koraput district of Orissa have been overlooked.

The fact is that the mining industry of the past as perceived and the mining industry of today are poles apart. The new age large mining companies both PSUs and MNCs involve the local population and look after their social welfare. These mining companies utilise the latest technology that is environment friendly and does the least damage to environment. In most cases, these companies leave a better and more productive land after mining is done. These companies spend a sizeable part of investment and later the profit on corporate social responsibility. This is true of NMDC mines in Chhattisgarh, Nalco mines in Damanjodi, Orissa and Tata Steel mines in Jharkhand and Orissa. In Damanjodi, after bauxite was mined, the whole mine was replaced by beautiful forest. NMDC’s Bailadila projects pay special attention to health, education, water supply and employment of local adivasis. The young generation of Adivasis were trained by the company in skills required for operating mines and the machines. Many of them have moved to other projects at higher positions. Large corporates, be it PSU or MNC or listed Indian group, are in compliance of all regulation and are also in constant public scrutiny and are fully conscious of their responsibilities.

An issue that gets generally raked up is mining and the tribal’s rights. The tribal areas, which stretch across eastern India from Jharkhand, Chhattisgarh to Orissa, involve rampant cases of land grabbing, illegal mining by mining mafias and involvement of local corrupt politicians and bureaucrats, who marginalise and alienate tribals in their homelands, thus bringing bad name to the mining industry as a whole. However it is always the high profile companies, Indian as well as MNCs, that get caught in the cross fire and bear the brunt of resentment. Companies such as NMDC, Tata Steel, Nalco, Balco and Hindalco, have conducted themselves in most transparent and people friendly manner and have responsible policies towards social responsibilities and adherence to strict mining procedures balancing the ecosystem they operate in.

The government should refrain from giving mining licenses to small fly-by-night operators and instead encourage large mining companies to participate in the development of the resources and the area. The government should create CSR models similar to that of NMDC, Tata Steel or Nalco for local development and set up a mechanism to monitor the same.

It is easy to criticise any mining project based on inputs from few individuals’ even locals instigated by vested interests. Are they aware that every year hundreds of tribals of Kalahandi die of malnutrition? What have they done all these years to improve the living condition of these people? How do they plan to stop these deaths?

The only solution is to develop industries in these areas but with human face. The mining companies have to win over the people themselves by their positive actions.

Mining and the tribals have to co-exist for economic development of the country and its people. Let us not keep the people of Kalahandi or Bastar in rags all their life. Let them improve their lot by the industrial development of the area.


Economic Times
Source : http://economictimes.indiatimes.com/policy/All-miners-do-not-harm-tribal-people/articleshow/5842150.cms

Gleaming Prospects - Hindustan Zinc

Hindustan Zinc
Rising metal prices and a strong management with deep pockets catapulted Hindustan Zinc (HZL) into a standout performer in the year gone by. And 2010 may well extend the company’s winning streak. So how did the Vedanta group company manage to get an edge over the others? Well, some prudent financial management, steady demand for zinc and low employee turnover chipped in to help the company sail through a difficult year. This year, metal companies can expect to breathe a little easier as the global economy slowly but surely gets back on its feet, which should bolster

Let’s start with a lowdown on the commodity itself. Currently almost half of the zinc used in the world is for galvanising steel or iron, coating the metal to protect it from corrosion. Zinc is also used to make brass, an alloy with copper. Other industrial uses like rubber making and healthcare use a substantial portion of zinc output. Zinc producers typically also produce lead and silver as by-products.

China is the world’s largest consumer of zinc, devouring more than a third of global output. India accounts for 4 per cent of annual global supply. Domestically, experts say the prospects for zinc consumption are humongous. Global consumption of zinc stands at an average 1.8 kg per annum; India, meanwhile, consumes just 0.4 kg. Hindustan Zinc is the monopoly producer of zinc in the country. Part of the UK-listed Vedanta group, it is also the second largest zinc manufacturer in the world. About 70 per cent of revenues come from zinc, while another 10 per cent comes from lead and about 3 per cent from selling silver.

Right now, zinc makers are having a good time. Steel companies, the biggest consumers of zinc, are reporting a revival in fortunes, which should be music to the ears of Hindustan Zinc shareholders. In addition to gleaming prospects at home, the company is also looking at overseas markets to bulk up revenues.

The past two years have been particularly bad for metal companies as prices tumbled across the board, heaping misery on some of the more leveraged players.

It was so bad that the initial part of 2009 saw investors shun stocks like Tata Steel and Hindalco, both of which had mountains of debt on their balance sheets due to the funding of overseas acquisitions. In sharp contrast, Hindustan Zinc turned into a safe bet as it navigated its way out of an uncertain environment quite effectively and with minimal financial damage.

On a roll

Zinc prices have almost doubled from the lows of December 2008

How did the company manage such a tumultuous year? “Despite a slow economy, our volumes continued to grow,” responds Akhilesh Joshi, chief operating officer of Hindustan Zinc. Steady demand helped. “Zinc demand in India has remained fairly robust. We are selling about 10 per cent more in 2009 than what we sold in calendar year 2008.” Because the company also places a high emphasis on developing and nurturing talent internally, it also experienced a very low attrition rate. Confidence-building measures, like additional recruitment during downturns and no job cuts, have also helped, adds Joshi.

Indeed, even as companies were laying off employees across sectors, Hindustan Zinc was rated the second best employer in India by Hewitt Associates in 2009. It also ranked among the top 25 best employers in Asia. While the defining moment for the company’s fortunes dates back to 2002, when it was acquired by the Sterlite group in a government disinvestment drive, Hindustan Zinc has maintained an impressive tempo of activity in the years since.

From having no captive power plants, it today boasts 314 mw of thermal power and 123 mw of wind power capacity. It’s a significant development, since power accounts for a big chunk of production costs for metal
companies.

An improved internal focus also helped. The company, through its continuous exploration focus with technological help, has improved the available resources by 110 billion tonne of ore between 2003 and 2008.

Enviable vital stats

The operating metrics of the company are enviable. From a turnover of Rs 1,470 crore in FY02, the company was clocking in revenues of Rs 8,560 crore by FY07. While the company will rake in lower revenues this fiscal year (top line growth is firmly meshed with LME zinc prices), the profitability and cash generation ability of Hindustan Zinc continue to be impressive.

Giriraj Daga of Khandwala Securities estimates the cash levels of the company were close to Rs 10,000 crore or Rs 241 per share by September 2009. Another analyst, Ashutosh Tiwari of K R Choksey (KRC), describes Hindustan Zinc as a “cash machine”.

What is the company doing with this treasure chest of cash? Well, some part is going into funding expansions. KRC’s Tiwari estimates that up to Rs 3,600 crore could be used. Current expansion plans include adding to the zinc and lead smelters, mine expansion and captive power addition.

“With the completion of a 210 kilo tonne per annum (ktpa) zinc smelter and a 100 ktpa lead smelter, HZL will become the world’s largest integrated zinc-lead producer with a production capacity of 1064 ktpa,” says Joshi. Looking ahead, the focus for Hindustan Zinc could be outside the country as much as within. “Globally, the demand recovery signs are becoming evident,” says Joshi, a veteran who has worked for more than three decades at Hindustan Zinc. “Demand growth is mainly expected to come from the developing nations including Asia, which is our main export focus.” In the domestic market, Joshi expects demand from infrastructure and telecom.

Bright start to the year

How does the outlook for 2010 look? Joshi’s confidence comes to the fore when he says that “prices are expected to remain fairly strong as the world economy sees further recovery. Our production costs are very competitive globally, and we remain focused on continuously lowering costs and expanding volumes to improve our margins and the bottom line.”

From here on, he says, “cost and volume will be the key differentiators. We are one of the world’s lowest cost producers and are continuously trying to reduce costs further. We will become the world’s largest integrated zinc-lead producer by 2010, augmenting the economies of scale.”

Analysts reckon that’s a fair assessment of the company. KRC’s Tiwari, for instance, says he has no doubts about the company’s cost effectiveness, but says he is wary about zinc prices this year, given that the dollar is expected to recover somewhat and global liquidity may be pulled back. He forecasts that zinc prices could fall to $2,100 per tonne in 2010 from the current $2,600 per tonne.

Domestically, he estimates demand for zinc could be nearly 1.5 times GDP growth. Other local bodies have also upped their forecasts for zinc demand, which is good news for Hindustan Zinc.

The stock was a 2009 investor favourite, as it thundered past life-time highs, even though the BSE metal index came nowhere close to its life-time peak. With strong economic growth expectations, good times for the stock look likely to continue, though perhaps not at the dizzying pace one saw last year.

While K R Choksey has a ‘reduce’ rating on the stock with a target of Rs 1,055, India Infoline has a price target of Rs 1,319, an upside of 6 per cent from current levels of Rs 1241.

Source : http://www.outlookprofit.com/article.aspx?263830

From the House of Women Entrepreneurs

Hindustan Zinc, bringing difference in the lives of thousands of rural women in Rajasthan...


Women in rural Rajasthan are for a change. Their social and economic conditions are changing and they are emerging as self reliant, self independent, micro entrepreneur, and decision makers in their house. The women of rural Rajasthan are experiencing women empowerment. Their house hold income is increasing multi-fold and there is a significant change in their quality of life.The credit goes to forming of Self Help Groups that has participation of about 10-12 rural women, primarily of the same village and surrounding.

Rajasthan is emerging as one of the leading State in India in development of Self Help Groups (SHGs). Hindustan Zinc alone facilitates 215 Self Help Groups in the district of Udaipur, Chittorgarh, Bhilwara and Rajsamand. More than 3,500 women are associated with these 215 Self Help Groups in the State. The important part is that all the Self Help Groups are linked with the banks and operate their bank accounts. The cumulative savings of these groups is about Rs. 45 Lacs and about 80% of these Self Help Groups have received a loan of about Rs. 50 lacs from the banks.

Radha Somani of Agucha village, took a loan of Rs. 10,000 and starated a Manihari Shop. Today she earns about Rs. 4,000/- per month. She says, "I am paying pack my installment and also my sons college fees. In soon my son would complete MBA and our days of hardship would change". Another women Shanti Mali is about 56 years of age, widow with one son. She was working as daily wager and fell ill. She took a loan of Rs. 15,000/- and started cultivating vegetables in 2 bighas of land. Today her daily earnings are over Rs. 500/-. She has become a small entrepreneur now.

With emphasis on self independence and improving their quality of life, about 60% members have opted and established their own micro-enterprise , viz. vegetable cultivation, mini dairy, tailoring shop, grocery shops, spice grinding units, imitation jewellery shop to name a few. This has brought a significant change in their economic conditions. On an average there has been an increase in their monthly income to the tune of Rs. 2,000 to Rs. 5,000.

Hindustan Zinc has not only been facilitating these Self Help Groups but also linking them with banks, and guiding them for opening micro enterprises. The role of Hindustan Zinc is important in terms of making these women participate in the Panchayat affairs, decision making in issues within their houses, at village level, and also uplifting their quality of life. The Company has been educating them on savings, inter-loaning and capacity building, including, providing need based training to the members.

The exercise begins in convincing individual women for forming a group i.e SHG, their training, imparting knowledge in book keeping and continuously motivating them till they start achieving results. “There is also resistance from men in the family said ,” Bhanwar Singh Chundawal, sarpanch, Nagari village in Chittorgarh. “They fear their wives and daughters-in-law are going to become too independent for their liking.” In spite of all that, self-help groups are spurring hope and aspirations for women like Chunki Devi, 47. A widow and mother of four, she has struggled for 11 years to earn a living. Recently she joined a self , help group in Agucha and is taking a Rs 25,000-loan to buy seeds and fertilizers for her fields. “I hope my days of poverty would soon come to an end,” said Devi, a lohar (blacksmith) by caste.

Some self-help groups, such as the one in Ganeshpura village of Chittorgarh, work towards generating collective income for their members.

“Our group works together to make bags, bed sheets and rakhis,” said Chanchal Parikh, 37, its president. “We have tied up with a person for bulk orders.” The groups also give loans to its members. Their functioning is largely democratic - with regular elections to the posts of president, secretary and treasurer.

The biggest concern is that most of these women are not literate; so, they have to depend on others to operate their bank accounts and handle finances. Although the groups meet every month to discuss socially relevant issues such as childcare, family planning and sanitation, many members fail to benefit because they are not educated.

In a country where women empowerment in rural area plays an important role in the economic development of the nation, the participation of Corporates in forming of SHGs is important.