Monograph-No 10

CESS MONOGRAPH 10
RULNR MONOGRAPH - 3
Bauxite Mining in Eastern Ghats:

Mapping the Livelihoods of Affected Communities
Prajna Paramita Mishra

M. Gopinath Reddy
RESEARCH UNIT FOR LIVELIHOODS AND NATURAL RESOURCES

(Supported by Jamsetji Tata Trust)
In collaboration with Research Partner
SAMATA, VISAKHAPATNAM
CENTRE FOR ECONOMIC AND SOCIAL STUDIES

Begumpet, Hyderabad-500016
March, 2010
CESS Monograph - 10 ii
CENTRE FOR ECONOMIC AND SOCIAL STUDIES MONOGRAPH SERIES
Number - 10 March, 2010

ISBN 81-88793-11-6
Series Editor : S. Galab
© 2010, Copyright Reserved

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Bauxite Mining in Eastern Ghats: Mapping the Livelihoods of Affected Communities iii
Foreword
The Centre for Economic and Social Studies (CESS) was established as an autonomous
research centre in 1980. Conducting interdisciplinary research in analytical and applied
areas of social science, encompassing socio-economic and other aspects of development,
constitute the predominant activities of the centre. The Centre's research has developed
expertise on themes such as rural development and poverty, agriculture and food security,
irrigation and water management, public finance, demography, health, environment
and other studies. Its sphere of research activities has expanded beyond the state of
Andhra Pradesh, covering other areas of the country. The Centre has made important
contributions to research in these areas.
Dissemination of research findings to fellow researchers and policy thinkers is an important

dimension of policy relevant research which directly or indirectly contributes to policy
formulation and evaluation. CESS has published several books, journal articles, working
papers and monographs over the years. The monographs are basically research studies
and project reports prepared at the Centre. They provide an opportunity for CESS
faculty, visiting scholars and students to disseminate their research findings in an elaborate
form.
The CESS has established the Research Unit for Livelihoods and Natural Resources
(RULNR) in the year 2008 with financial support of Jamsetji Tata Trust. The core
objectives of the RULNR are to conduct theoretical and applied research on policy
relevant issues on human livelihoods and natural resource management, especially in
areas related to river basins, forest and dryland ecosystems and to provide an effective
platform for debates on policy relevant aspects for academicians, policy makers, civil
society organizations and development practitioners. RULNR intends to adopt a multi-
disciplinary approach drawing on various disciplines such as ecology, economics, social
anthropology, political science.
This RULNR-CESS monograph titled "Bauxite Mining in Eastern Ghats: Mapping the
Livelihoods of Affected Communities" by Prajna Paramita Mishra and M. Gopinath
Reddy is an attempt to map the existing livelihoods pattern of affected communities in
the mining areas. It assesses the exact costs and benefits of the mining projects and tries
to understand the Resettlement and Rehabilitation (R and R) packages. The help of
Samata, a social justice organization in Visakhapatnam is gratefully acknowledged in the
fieldwork of this study.
CESS Monograph - 10 iv
This study shows that all project affected people do not have a sustainable livelihood.
They are trying best to make a living out of their agricultural land and forest. Once
mining or a refinery starts, they will be deprived of these assets. The authors find that
the compensation money paid is not good enough for an alternative sustainable living
and that the affected households do not spend the money received on developing an
alternate livelihoods strategy. Developing such an alternative would be critical in resolving
the development-environment conflict.
I hope that this monograph will be useful for academicians, policy makers and
development practitioners as an assessment of the existing livelihood opportunities of
people in the upcoming bauxite mining areas.
Manoj Panda
Director, CESS
Bauxite Mining in Eastern Ghats: Mapping the Livelihoods of Affected Communities v
CESS Monograph - 10 vi
Bauxite Mining in Eastern Ghats: Mapping the Livelihoods of Affected Communities vii
CONTENTS
Sl. No Page no.
Foreword iii
List of Tables & Figures ix
Acknowledgements xi
Abbreviations xii
Executive Summary xiii
Chapter 1 Introduction 1 - 10
1.1 Introduction
1.2 Statement of the Problem
1.3 Research Gap
1.4 Objectives
1.5 Conceptual Framework
1.6 The Methodology, Study Area and Sample Selection
1.7 Report Structure
Chapter 2 Mining Scenario in Andhra Pradesh 11 - 19
2.1 Mining in Andhra Pradesh
2.1 Bauxite Mining in India
2.3 Bauxite Mining in Andhra Pradesh
2.4 Mining in Forest Areas of Andhra Pradesh
Chapter 3 Livelihoods of Affected Communities 20 - 42
3.1 Introduction
3.2 Diversified Rural Livelihoods
3.2.1 Livelihoods Diversification: A Gender Dimension
3.3 Mining and Livelihood Assets
3.3.1 Human Capital
CESS Monograph - 10 viii
3.3.2 Social Capital

3.3.3 Natural Capital
3.3.4 Physical Capital
3.3.5 Financial Capital
3.4 Conclusion
Chapter 4 Bauxite Mining and Displacement 43- 54
4.1 Mining induced Displacement
4.2 Land Requirement of Jindal and Anrak
4.3 Asset Acquisition in the Sample Villages
4.4 Compensation Package of Jindal and Anrak
4.5 Conclusion
Chapter 5 Summary and Conclusion 55 - 61
5.1 Introduction
5.2 The Findings
5.2.1 Existing Livelihoods of Affected Communities
5.2.2 Displacement Scenario
5.3 Policy Options
5.4 Conclusion
References 62
Bauxite Mining in Eastern Ghats: Mapping the Livelihoods of Affected Communities ix
LIST OF TABLES AND FIGURES
Table No Page No
1.1 List of the Study Villages 9
2.1 Mineral Reserves of Andhra Pradesh 12
2.2 District-wise Production of Minerals in Andhra Pradesh 13
2.3 Bauxite Deposits of Andhra Pradesh 16
3.1 Key Features of Sample Villages 22-23
3.2 Demographic Features of Sample Villages 24
3.3 Primary Economic Activities of Individuals 28
3.4 Secondary Economic Activities of Individuals 29
3.5 Educational Status of Sample Households 31
3.6 Status of Health of the People in Study Areas 31
3.7 Membership in Formal Institutions 32
3.8 Trust in Lending and Borrowing 33
3.9 Access to Natural Capital 34
3.10 Landholding in Sample Villages (% of Households) 34
3.11 Important Common Property Resources (CPRs) 35
3.12 Sources of Drinking Water 36
3.13 Housing Status in Study Area 36
3.14 Physical Assets 37
3.15 Mean Household Income of Villages 38
3.16 The Herfindahl Index for Income Diversification 38
3.17 Household Expenditure (%) 39
3.18 Food Security 39
3.19 Ownership distribution by households of selected livestock 40
3.20 Sources of Borrowing 41
4.1 Land Requirement of Jindal and Anrak Refinery 45
4.2 Land Details given by JSW 45
4.3 Final Land given to Jindal 46
4.4 Asset acquisition details (% of Households) 47
CESS Monograph - 10 x
4.5 Landholding of Sample Households in the Refinery Area 48

4.6 Change in Land of Different Size-Class Household 49
4.7 Details of Compensation Package 50
4.8 Received Compensation (Jindal) 51
4.9 Received Compensation (Anrak) 51
4.10 Spending of Compensation details by the Affected Households 52
FIGURES
1.1 Sustainable Livelihoods Framework 6

2.1 District - wise Mineral Revenue in Andhra Pradesh (2006-07) 12
2.2 Value of Exports from Mineral and Mineral products in Andhra Pradesh 14
2.3 Bauxite Mines in India 15
2.4 Mining in Forest Areas of Andhra Pradesh 18
3.1 Primary Occupation in Jindal Refinery Area 26
3.2 Primary Occupation in Anrak Refinery Area 26
3.3 Primary Occupation in Jindal Mining Area 27
Bauxite Mining in Eastern Ghats: Mapping the Livelihoods of Affected Communities xi
Acknowledgements
At the outset, we humbly acknowledge our indebtedness to the Jamsetji Tata Trust,
Mumbai, for providing financial support to carry out this research work. The research
work for a study on Bauxite Mining in AP was first conceived by Prof. V. Ratna Reddy.
We are thankful to him for his support and encouragement during the various stages of
this work. Special thanks to our research partner Samata, and its team members
Mr. Rebbapragada Ravi, Mr. G. Satya Srinivas, Mr. Ganjivarapu Srinivas and others for
their timely help.
The first draft of our proposal and draft report was commented by Mr. Patrik Oskarsson.
We are thankful to him for his valuable comments. Thanks to Prof. Kanchan Chopra,
Prof. M.V. Nadkarni and Dr. Prodyut Bhattacharya for their valuable comments. We are
thankful to Prof. Kailas Sarap for his valuable comments on the final report. We would
like to thank Prof. Manoj Panda, Director, CESS, for all the support and encouragement
during the period of this study.
We are thankful to all the faculty members of RULNR and CESS for their valuable
comments. Special thanks to Dr. G.K Mitra for all his help during the stage of sample
selection, Mr. Vijay Kumar, Librarian, CESS, for his insightful comments and for
providing timely material. We would also like to thank the staff in the libraries of ASCI,
IGM Library, University of Hyderabad, NIRD and EPTRI, Hyderabad, for the help
they extended. We thank Dr. Padmanabha Rao, CESS, for all the administrative and
infrastructural facilities.
We acknowledge the support of Mr. Krishna Murthy, Finance Officer, RULNR, Ms.
Devi, Office Secretary, RULNR, and Mr. Sridhar. Mr. Nagaraju needs special mention
for his very productive work from the beginning to the end of the field work. Thanks to
Ms. B. Neelima and Mr. Nagaraju Kotari for neatly entering the data. Thanks are also
due to Mrs. K. Rajakumari for meticulous editing and proof reading of the report.
Last, but not the least, we are indebted to the villagers of our study area for patiently
answering all our questions.
Prajna Paramita Mishra

M. Gopinath Reddy
CESS Monograph - 10 xii
ABBREVIATIONS
AAL Anrak Alumina Limited

AP Andhra Pradesh
APIDC Andhra Pradesh Industrial Development Corporation
APMDC Andhra Pradesh Mineral Development Corporation
BC Backward Caste
CCF Chief Conservator of Forests
CCLA Chief Commissioner of Land Administration
CM Chief Minister
CPR Common Property Resources
CSE Centre for Science and Environment
DFID Department for International Development
DPs Displaced Persons
DWCRA Development of Women and Children in Rural Area
EIA Environmental Impact Assessment
EPTRI Environment Protection Training and Research Institute
GoAP Government of Andhra Pradesh
GoRAK Government of Ras Al Khaimah
GSI Geological Survey of India
ICDS Integrated Child Development Services
ICFRE Indian Council of Forestry Research and Education
JSWAL Jindal South West Aluminium Limited
JSWHL Jindal South West Holding Limited
LTR Land Transfer Regulation
MECON Metallurgical Engineering Consultants
MIDR Mining-Induced Displacement and Resettlement
MoEF Ministry of Environment and Forest
MoU Memorandum of Understanding
MT Million Tons
MTPA Million Ton Per Annum
NALCO National Aluminium Company
NGO Non Government Organisation
NTFP Non Timber Forest Product
PAPs Project Affected Persons
PDS Public Distribution System
PESA Panchayat Extension to Scheduled Areas
R and R Resettlement and Rehabilitation
RF Reserve Forest
SC Scheduled Caste
SHG Self Help Group
ST Scheduled Tribe
TERI The Energy and Resources Institute
TPY Ton Per Year
Bauxite Mining in Eastern Ghats: Mapping the Livelihoods of Affected Communities xiii
Executive Summary
According to the Geological Survey of India, bauxite deposits of Andhra Pradesh (AP)
and Orissa, referred as the East Coast Bauxite deposits are the largest bauxite reserves in
the country, with Orissa accounting for 51 percent and AP 21 percent of the total
reserves in India. Though bauxite mining started in Orissa long back (25 years), it is yet
to start in AP. The causes for this obstacle in AP are control of technology by a few
multinational companies, lack of financial resources, violent Maoist movement gaining
strength in the bauxite hills, and the awakening of the civil society to the negative
consequences of bauxite mining. However, the present Congress Government has again
promoted this project.
The main objectives of this study are to map the existing livelihoods pattern of the
affected communities in the mining and refinery areas that have been initiated in the
Eastern Ghat areas of AP, and to assess how mining will influence the livelihoods of the
communities. It also tries to understand the Resettlement and Rehabilitation (R and R)
packages and the perception of the communities on the R and R policies. It uses both
primary and secondary sources of information and analysed the same within a sustainable
livelihood framework. The report has been accomplished in five chapters including
introduction and conclusion.
The introductory chapter provides a discussion on the background of the study,

methodology, research gaps and limitations of the study. The second chapter discusses
the profile of mining with special reference to bauxite mining in India in general and AP
in particular. It has provided a detailed status of different types of minerals including
that of bauxite mines in different regions of AP. It also discusses the special status of
bauxite mines located in different regions of AP and proposed refinery and mining
activities because of the MoUs signed by the AP Government. It is pointed out that a
large chunk of the forest area has been diverted for mining purposes, as the mines are
located in forest areas. There has been public concern about the loss of livelihood of
local communities, wildlife and sources of water due to diversion of forests in the
Visakhapatnam District since long and these issues have once again come to centre stage
due to the recent agreement for mining of bauxite.
The focus of chapter III is twofold. It captures the existing pattern of livelihoods of
affected communities in the mining areas. It also assesses the impact of the proposed
mining on the livelihood of the local communities. The analysis is based on data collected
CESS Monograph - 10 xiv
from 12 villages in the refinery and mining areas, in the light of the sustainable livelihood
framework. The socio-economic characteristics of households residing in the Jindal
Mining and Refinery areas are dominated by tribal population. Farming, wage labour,
Podu cultivation and collection of non-timber forest products are the major sources of
livelihood here. By contrast, the majority of population, living in Anrak Refinery areas,
belong to other Backward Castes, and farming and wage labour are their important
sources of livelihood. The majority of the villages have basic infrastructure such as school,
road, electricity and drinking water. In all the study villages women's participation is
very high in traditional activities like wage labour and collection of NTFP. However,
their access to formal jobs is very low due to lack of human capital. According to
sustainable livelihood approach, people require a range of assets to achieve positive
livelihood outcome that they seek. Availability of different types of capital, namely,
human capital, social capital, natural capital, physical capital and financial capital in the
study areas is discussed.
Human capital is required to make use of any of the four types of capital. But it has
been found that the overall literacy in general is low, and that of females is much lower
in comparison with their male counterparts. Similarly, access to healthcare in the mining
area is low. Households residing in the refinery area are mostly poor with only access to
natural capital and a majority of them are illiterate, deprived of food security for the
major part of the year. As a result, they have to rely more on wage labour and collection
of NTFP. By contrast, households located in Jindal Mining areas own agricultural land
and have access to forest. Agriculture is the main source of income in addition to collection
of forest products.
Given these contrasting scenarios, what will be their prospective livelihood status after
the refinery and mining operation begin, are subject of discussion of next chapter. Chapter
IV provides a discussion on mining-induced displacement and its consequences. It
particularly analyses the displacement scenario, R and R packages promised and
implemented by both companies. In the absence of provision of land to the displaced
households, the percentage of households that going to lose cultivated land is very high.
Companies, in both the areas have promised compensation for loss of land and other
assets, and one job to each patta holder. But given the low level of education among the
members of households in both the areas, they have been accommodated as low skilled
menial jobs. A majority of the patta holders have received monetary compensation for
the displaced land, which varies from Rs.2 lakh to Rs.4 lakh and some amount of money
for loss of other assets.
Bauxite Mining in Eastern Ghats: Mapping the Livelihoods of Affected Communities xv
A substantial amount of compensation money received by the affected households has

been spent on unproductive expenditures and the rest of the funds have been deposited
in their bank accounts. However, this saving can be spent at any time by the households
for any purpose. Further, the Jindal Company has promised to allot some shares in the
company. But the compensation principle is mostly in terms of money and the amount
given to the affected families may not strengthen sustainable livelihoods of the displaced
families.
The last chapter provides a summary of the main findings of the study. Compensation
policies followed in the area in the light of good policies followed in other countries are
evaluated. It is concluded that the compensation policy followed in the study areas is
not enduring for sustainable livelihood.
*****
CESS Monograph - 10 xvi
About Author
An economist specializing in environmental and natural resource economics, Prajna

Paramita Mishra is Assistant Professor, Research Unit for Livelihoods and Natural
Resources (RULNR) at the Centre for Economic and Social Studies (CESS),
Hyderabad. She did her Ph.D jointly from CESS and University of Hyderabad. She
was the recipient of ICSSR Institutional Doctoral Fellowship at CESS and
Commonwealth split-site Scholarship tenable in the United Kingdom to pursue
research as a visiting student at the University of East Anglia, Norwich, UK. Her
research interest includes mining, livelihood analysis and economic valuation.
A political scientist and public administration specialist, M.Gopinath Reddy is

Professor and Principal Coordinator, Research Unit for Livelihoods and Natural
Resources (RULNR) at the Centre for Economic and Social Studies (CESS),
Hyderabad. He specializes in decentralized governance, livelihoods and poverty analysis
and institutional approaches to natural resource management. He has to his credit
more than 35 publications in international and national journals and has also edited
some books.
Bauxite Mining in Eastern Ghats: Mapping the Livelihoods of Affected Communities xvii
CHAPTER - 1
INTRODUCTION
1.1 Introduction
st
On 1 July, 2005, a Memorandum of Understanding (MoU) was signed between Jindal
South West Holding Limited (JSWHL) of the Jindal Group and the Government of
Andhra Pradesh (GoAP) to set up an alumina and aluminum1 refinery and smelter to
produce about 2,50,000 tons of aluminum per annum initially, with a provision for
suitable expansion in the state of Andhra Pradesh (AP), at locations other than the
Scheduled Areas, with a capital outlay of about Rs.90 million. This was followed by
another MoU, on 14th February, 2007, between the Government of Ras Al Khaimah
(GoRAK), from the United Arab Emirates and the GoAP to set up an alumina and
aluminum refinery and smelter to produce one Million Tons (MT) of alumina and
2,50,000 tons of aluminum per annum initially, with a provision for suitable expansion,
in the state of AP, at locations other than the Scheduled Areas, with a capital outlay of
about US$2 billion. The GoRAK created an Indian company called ANRAK, and
JSWHL created JSW Aluminium Limited (JSWAL), as a special purpose vehicle to
implement these projects. Both companies will allot minority shares to the GoAP as
part of the MoUs.
The two cases were identical in their plans to mine bauxite from the Agency Area of
Visakhapatnam District via government-owned Andhra Pradesh Mineral Development
1
Aluminum originates as an oxide called alumina. Aluminum itself does not occur in nature as
a metal. Deposits of bauxite ore are mined and refined into alumina – one of the feed stocks for
aluminum metal. At the refinery, alumina is extracted from the bauxite ore; and at the smelter,
aluminum is extracted from its oxide alumina.
CESS Monograph - 10 2
Corporation (APMDC)2 . According to the MoU, APMDC/GoAP should not sell or

export bauxite from these deposits to any other party without meeting the requirements
of the said company. APMDC will supply bauxite to Jindal from Araku (Galikonda,
Raktakonda and Chitaamgondi) and Saparla groups, consisting of approximately 2,446
hectares and containing approximately 240 MT of bauxite ore. Bauxite for Anrak will
go from the Jerrala Group of deposits, Chintapali Mandal, spread over 1,649 hectares
with probable reserves of 224 MT. The proposed refinery of Jindal is in the plain area3 of
S.Kota Mandal of Vizianagaram District, and the proposed alumina complex of Anrak
is in the plain area of Makavarapalem Mandal of Visakhapatnam District.
1.2 Statement of the Problem

Both these mining areas come under the Fifth Schedule of the Indian Constitution4 .
They are home to several tribal populations, belonging to Bhagata, Khond, Konda Reddi,
Samantha and other communities. Twenty-seven hills in Visakhapatnam District have
been identified for bauxite mining. Each mining site has at least 10 villages surrounding
it, which means that approximately 270 villages will be adversely affected (Ganjivarapu
2007).The affected that include the tribal people from Visakhapatnam and Vizianagaram
districts, and agriculturists are strongly protesting against the government’s efforts to
start mining. According to them, bauxite mining will bring disaster to the area.
2
In the landmark Samata Judgment of 1997, the Supreme Court ruled that the state has no
right to grant leases even on government-owned forest land to private companies on areas
governed by the Fifth Schedule of the Constitution, and that only cooperative societies solely
run by Scheduled Tribes could mine in such areas, subject to compliance with the Forest
Conservation Act and the Forest Protection Act. As a result of the judgment, the AP Government
was directed to stop all private mining within Scheduled Areas. As the area with bauxite reserves
in the state came under the notified tribal zone, it could be leased out only in favour of the
tribals or state-owned enterprises as per the directives. Accordingly, the AP Government decided
to offer lease rights to the APMDC and sell the bauxite to the aluminum companies. By using
APMDC as a dummy corporation, the government is trying to avoid the ruling in the Samta
Judgment. However, it is also illegal to use APMDC as a dummy on behalf of private companies.
3
According to the AP Land Transfer Regulation 1959, transfer of tribal areas to non-tribals is
prohibited. Therefore, they have proposed to construct the refinery in a non-tribal area.
4
The Fifth Schedule of the Constitution of India deals with the administration and control of
Scheduled Areas and Scheduled Tribes in these areas. It covers tribal areas in 9 states of India
namely Andhra Pradesh, Jharkhand, Gujarat, Himachal Pradesh, Maharashtra, Madhya Pradesh,
Chhattisgarh, Orissa and Rajasthan.
Bauxite Mining in Eastern Ghats: Mapping the Livelihoods of Affected Communities 3
Displacement of tribals is the foremost concern. Most of the jobs would be technical,
and in the modern mechanized mining sites, there will be very little scope of employment
for tribals. They depend on forest for their livelihoods and destruction of forest will ruin
their livelihoods. NGOs and media representative raised concerns that mining will disturb
the hill streams which supply water to the plain areas. The mining areas are catchments
to important rivers such as Sileru, Matchkhaund and their tributaries, the Gosthani and
Sarada. According to an article, “Bauxite Mining is Disastrous: NGO”, published in the
Hindu on 19th July 2005, the hills with bauxite reserves generally act like a hard cap to
protect the soil and moisture of these hills, once the layer is removed, it (large scale
mining) would completely denude the soil and biodiversity, besides dangerously affecting
the water table. The groundwater in the area will be completely exhausted. Visakhapatnam
City is already facing water scarcity, which will be further aggravated. All these issues
need to be better investigated. There are coffee plantations below the bauxite-rich areas,
and the villagers grow rice, pulses and beans there. Around 2,025 ha of coffee plantations
will be lost if the mines come up; numerous workers in the plantations will lose their
jobs (Bhatta 2008).
The Environment Protection and Research Institute (EPTRI), Hyderabad, has submitted
a proposal to the Ministry of Environment and Forests (MoEF) to declare the area as
“ecologically sensitive”, owing to its rich natural diversity. According to the The Energy
Resources Institute (TERI) report, 2001, “to have access to the bauxite deposits around,
25 major tribal villages in the Eastern Ghats have to be displaced, around 10,000 trees
have to be pulled out, and the state will lose around Rs.1,520 crores in terms of
environmental degradation such as soil erosion. There is fear over the threat posed to the
Girijan lifestyle and the ecosystem of the Eastern Ghats” (Ganjivarapu 2007).
According to the former Andhra Pradesh State Mines and Geology Minister, Ms P.
Sabita Indra Reddy, the JSW project would offer employment to 3,000 directly and
over 10,000 indirectly. Of this, a majority of the jobs would be offered to the local
tribals. The Government would strive to ensure basic amenities to the tribals in the
bauxite mining area in the form of schools, hospitals and other social infrastructure,
even before the JSW project takes off. In terms of the current regulations, nearly 40
percent of the royalty received from bauxite mining would be spent on tribal development
initiatives. This poses a big question is this really going to materialize?
Samata and AP Girijana Sangham demand that the project be stalled, and have been
organizing several awareness programmes about the harmful effects of bauxite mining,
and protest rallies and dharnas to stall the project. The project violates the Regulation
1 of 70 of the Andhra Tribal Land Transfer (Prevention) Act. As the area with bauxite
reserves in the State is under the notified tribal zone, it could be leased out only in
favour of tribals or state-owned enterprises, as per Supreme Court directives. In the
“Samata Judgment” the Supreme Court has clearly stated that only the Government,
public sector undertakings and local tribal societies are empowered to take up mining.
In this regard, Gram Sabhas in the tribal villages have also passed resolutions under
Panchayat Extension to Scheduled Areas (PESA) Act. Therefore, it is interesting to study
how they have dealt with all these acts in this area.
1.3 Research Gap

In January 1994, the Ministry of Environment and Forest (MoEF) issued the
Environmental Impact Assessment (EIA) notification under the Environment (Protection)
Act, 1986. The notification imposed restrictions on undertaking new development
projects, or expansion or modernization of existing ones, unless environmental clearance
was obtained from the ministry. The idea was to assess the principal environmental and
social impacts of the projects to ascertain the likely costs and benefits of the proposed
projects. In 1997, an amendment mandated a public hearing for a project before the
final clearance. In September 2006, a new EIA notification was brought into force after
“re-engineering” the existing provisions. It classified the projects into two categories:
Category A (mining projects with a lease area of 50 ha or more) projects require clearance
from the Central Government and Category B (projects smaller than 50 ha but more
than 5 ha) projects can be cleared at the state level.
However, there are several drawbacks in the EIA. A consultant agency was commissioned
by the project proponent to prepare the report. Therefore, it is no longer an impartial
body. The same happened in case of bauxite mining in AP. The EIA for the proposed 1.4
MTPA alumina refinery and co-generation plant of Jindal at Srungavarapu Kota,
Vizianagaram District, was prepared by Vimta Labs Ltd., Hyderabad. Similarly, the
EIA for the proposed alumina refinery (1.5 MTPA), aluminum smelter (0.25 MTPA)
and gas-based combined cycle co-generation plant (90 MW) at Makavarapalem Mandal
of Visakhapatnam District by Anrak Aluminum Ltd. was prepared by B.S. Envi-tech
(P) Ltd., Hyderabad. The EIA and Environment Management Plan for Jerrala Block
and Araku and Anantagiri Bauxite Mines, Visakhapatnam District was submitted to the
Andhra Pradesh Mineral Development Corporation (APMDC) by the Environmental
Impact Assessment Division of the Indian Council of Forestry Research and Education
(ICFRE), Dehradun.
A detailed analysis of these four EIA reports show that, they have neglected the socio-
economic aspect. Neither there is any clear analysis about the existing socio-economic
conditions of the people, nor on the future impact of mining on their livelihoods.
Therefore, the Research Unit for Livelihoods and Natural Resources (RULNR) of the
Centre for Economic and Social Studies (CESS), Hyderabad, tried to fill this gap.
To conduct this study Samata, a social justice organization in Visakhapatnam was
identified as partner. Samata as a social justice organization works for the rights of the
tribal people of AP and for the protection of the natural resources and ecology of the
Eastern Ghats. They have immense experience in field coordination and data collection.
Samata provided support in the form of providing field researchers, coordination at
Visakhapatnam and overall coordination from Hyderabad.
1.4 Objectives
The study has the following main objectives:
(i) To map the existing livelihoods pattern of the affected communities in the mining
and refinery areas.
(ii) To assess how mining will influence the livelihoods of the communities and
what exactly will be the benefits and costs from the mining projects.
(iii) To understand the Resettlement and Rehabilitation (R and R) packages and to
study communities’ perception on the same.
1.5 Conceptual Framework

Livelihood, in its simplest sense, is a means of gaining a living and comprises the
capabilities, assets and activities required for a means of living. A livelihood is sustainable
if it can cope with and recover from stress and shocks, maintain or enhance its capabilities
and assets, and provide sustainable livelihood opportunities for the next generation, and
contributes net benefits to other livelihoods at the local and global levels in the short
and long term (Chambers and Conway 1992). Ellis (2000) defines livelihood as that
which comprises “… the assets (natural, physical, human, social and financial capital),
the activities, and the access to these that together determine the living gained by the
individual or household”. This definition stresses the means rather than the ends.
Assets are stocks of productive factors that produce a stream of returns either in cash or
in kind; for example, bank deposits, land, livestock, machinery, etc. Assets are of two
types - Productive and Non- productive (Barrett and Reardon 2000). Productive assets
are used as inputs in production; they generate income indirectly. For example, land,
livestock, skills, etc. Non-productive assets generate income directly, for example, jewellery.
Individuals, may privately own any of these assets, or they may be collectively held by a
community. Activities are the particular uses of productive assets to generate income.
For example, livestock can be used for crop production, manufacturing and livestock
production.
The livelihood approach to understand the survival strategies of the poor people, as well
as development process, has become increasingly popular in the last decade. Since the
late 1980s, a new angle in these literatures has been the emphasis on sustainability.
In its simplest form, the framework views people as operating in a context of vulnerability.
Within this context, they have access to certain assets or poverty-reducing factors. These
gain their meaning and value through the prevailing social, institutional and organisational
environment. This environment also influences the livelihood strategies - ways of
combining and using assets – that are open to people in pursuit of beneficial livelihood
outcomes that meet their own livelihood objectives. These all relate to processes of
change to the conditions in which people’s livelihoods operate, and the response of
livelihoods to these changes.
Figure 1.1 Sustainable Livelihood Framework
Source: DFID (1999)
This approach has largely been used in the agriculture and rural livelihoods projects, but
its relevance to mining projects has not been much assessed. In this study, instead of
starting with the vulnerability, it describes different economic activities the households
of proposed mining and refinery villages are pursuing. The affects of these activities on
the assets, in the form of five types of capital are studied. These assets influence and are
also influenced by the policies and institutions. Finally, they adopt different livelihood
strategies, which result in the diverse livelihood outcomes.
People require a range of assets to achieve positive livelihood outcomes. They are, Human
Capital, Natural Capital, Financial Capital, Physical Capital and Social Capital. These
capitals are the different forms of livelihood assets that the households can use to make
a living. Human Capital represents the skills, knowledge, ability and good health that
enable people to pursue different livelihood strategies and achieve their livelihood
objectives (DFID 1999). Natural Capital, which entered into the development discussion
in the 90s, consists of two elements: Non-renewable resources such as minerals, forests
and soils; and Renewable resources such as ecosystem services and nutrient cycling.
Natural capital is measured in terms of changes in availability of drinking water, land
quality, ground water and environment (Reddy and Soussan 2004). The conceptual
definition of Social Capital is still being debated. The general notion is the existing
stocks of mutual trust or connections between people that provide a flow of resources
enabling not only solutions to problems but also pursuit of political and economic
activities.
Physical Capital comprises basic infrastructure and producer goods needed to support
livelihoods. Important components of infrastructure are affordable transport, secure
shelter and buildings, adequate water supply and sanitation, clean affordable energy and
access to information. Producer goods are the tools and equipment that people use to
function more productively. Financial Capital denotes the financial resources that people
use to achieve their livelihood objectives. They include savings and convertible liquid
assets as well as regular flows of money such as earned income, pensions, transfer from
the state and other remittances (DFID 1999).
1.6 The Methodology, Study Area and Sample Selection

Both primary and secondary sources of information have been collected for this study.
Secondary information was collected from the Socio-Economic Survey of AP, Statistical
Abstracts of AP, Geological Survey of India and the EIA reports of the companies. For
primary data collection the survey was carried out in different phases from March, 2009
to June 2009. Household survey with a structured questionnaire was carried out with
the help of a group of 12 trained assistants. This survey covered 355 households in
Visakhapatnam and Vizianagaram districts of Andhra Pradesh. Another set of qualitative
data was collected with the help of a structured village questionnaire. Small group
discussions took place on the socio-economic condition of the villages. These discussions
were informal in nature. Data were collected from 12 study villages.
Our study areas are situated in the Visakhapatnam and Vizianagaram districts of Andhra
Pradesh. The study area is divided into four zones, which consist of four mandals:
(1) S.Kota Mandal of Vizianagaram District (proposed Jindal Refinery),
(2) Anantagiri/Araku Valley Mandal of Visakhapatnam District (proposed Jindal Mining),
(3) Makavarapalem Mandal of Visakhapatnam District (proposed Anrak Alumina
complex) and (4) G.K.Veedhi Mandal of Visakhapatnam District (proposed Anrak
Mining). These zones are the starta of the study. As this is a geographically well-defined
area, it is very easy to identify the population by taking all the villages, which are near
the proposed mines and refinery areas. The list of villages was prepared with the help of
the EIA report. However, a visit to the study area shows that the EIA report did not
include the small hamlets.
Therefore, according to the first field report, a list of villages and hamlets which are near
the study area was prepared. Given the choice of a target population, the next step was
to put together a list of the target population, known as the sample frame population,
from which, ultimately, the sample was drawn. Secondly, a list of 15 villages5 was prepared,
which is just within three kilometer from the proposed mines and refinery areas and
where land acquisitions have either finished or just started (Table 1.1).
A look at the study villages shows that Jindal Mining area is tribal dominated; Anrak
Refinery area is dominated by Backward Castes and Jindal Refinery area has a mixed
population, though the majority is tribal. Therefore, instead of studying the existing
livelihoods of the tribals (at the beginning of this project the idea was to concentrate on
tribal livelihoods), it was decided to study the livelihoods of the affected communities.
The sampling of the households was done as per the following procedure: as the villages
near the refinery are comparatively bigger, 30 percent of the households were taken as
sample households. Habitats near mining area are small hamlets, so 50 percent of the
households were taken as sample households. Finally, 355 households are selected: 138
from Jindal Refinery area, 51 from Jindal Mining area and 166 from Anrak Refinery
area.
1.7 Report Structure

The present chapter is an introduction to this work. It starts with the background about
how the AP Government has signed the MoU with companies for bauxite mining. Then
5
Presence of Naxals prevented us from collecting data in the Anrak Mining area. Therefore,
our final study is based on 12 villages instead of 15 villages. Anrak Mining area is excluded
from all the following chapters.
Table 1.1
List of the Study Villages
Village Name Distance Acquisition Total No. of Households Total Sampled Households
from Land/
Refinery/ Home
Mining stead
(km)
JINDAL REFINERY – S. KOTA SC ST BC OC Total SC ST BC OC Total
Cheedipalem 0 Agr. Land 1 52 2 - 55 1 18 - - 19
& Home
stead
Chinakandepalli 1 Agr. Land - 5 47 - 52 - 4 14 - 18
Addateega 0.5 Agr. Land 1 52 5 3 61 - 14 3 2 19
Rayavanipalem 1.5 Agr. Land - 34 7 - 41 - 9 3 - 12
Ammapalem 3 Agr. Land 31 127 44 7 209 8 42 11 1 62
Mettapalem 3.5 Agr. Land - 20 - - 20 - 8 - - 8
Total 138
JINDAL MINING – ANANTAGIRI
Chettamgondi 0 Agr. Land - 20 - - 20 - 10 - - 10
& Home
stead
Barajola 0.5 Agr. Land - 40 - - 40 - 20 - - 20
Eugovasova 0.2 Agr. Land
& Home
stead - 42 - - 42 - 21 - - 21
Total 51
ANRAK REFINERY – MAKAVARIPALEM
Dharmavaram 0.5 Agr. Land - - 45 - 45 - - 13 - 13
Kottapalem 0 Agr. Land 9 - 141 - 150 5 - 40 - 45
& Home
stead
G Venkatapuram 0 Agr. Land 3 - 354 5 362 2 104 1 107
& Home
stead
Total 165
ANRAK MINING – GK VEEDHI
Rallagedda
Egajanaba
Chintalawada
Total
Source: Field Study (2009)
it mentions the related problems with bauxite mining and how the agitation is going on.
It talks about the research gap followed by objectives and methodology. The second
chapter gives a profile of mining in AP, particularly bauxite mining. It also gives a pan
India picture of bauxite mining and discusses why it has not started in AP yet. The third
chapter deals with the study of existing livelihoods of the affected communities. It discusses
how people have access to different types of capitals and how mining will change their
livelihoods. Chapter four concentrates on Resettlement and Rehabilitations. It studies
how the Government of AP is dealing with the same and how people are reacting about
the given packages. Chapter five concludes the study.
CHAPTER - 2
MINING SCENARIO IN ANDHRA PRADESH
2.1 Mining in Andhra Pradesh

Andhra Pradesh, renowned as the mineral storehouse of South India, stands 1st among
the important mineral producing states of the country. During 2006-07, the mineral
revenue of the state rose to Rs. 1,363.06 crores6 . The state has identified 48 varieties of
minerals; important among them are gold, diamond, bauxite, limestone, coal, oil and
natural gas, manganese, dolomite, calcite, iron ore, barytes, uranium, granite, etc. In
addition to the identified and explored mineral deposits, there are vast tracks of virgin
areas in tribal areas of Eastern Ghats and Nallamalai areas. With such vast mineral
potential, the state has formulated strategies to explore, exploit and develop the mineral
sector with public-private partnerships (Government of Andhra Pradesh 2008). Table
2.1 shows the mineral reserves of Andhra Pradesh.
Andhra Pradesh has the highest reserves of barytes in the country. The state is the leading
producer of barytes and contributes about 90 percent to the total country’s production.
Huge reserves are found in Kadapa, Prakasam and Nellore districts (Table 2.2). The
world’s largest single deposit with an estimated reserve of 70 MT occurs in Mangampet,
Kadapa District. The state has 54 percent of India’s ball clay reserves. There is a vast
scope to develop and export calcite from the state. Limestone in AP is being exploited
locally and exported to different parts of the country and other countries for flooring.
The state has 39 percent of India’s gold reserves and during the regime of Vijayanagaram
Empire also it was known for gold mining. The state has 30 percent of bauxite, which is
not yet explored. The state is also known as one of the best diamond reserves in the
country, with a 16 percent reserve. The state is the only producer of coal in South India.
It is also one of the few states producing manganese ores.
6
Other mineral- rich states are Jharkhand (Rs. 1008 crores), Rajasthan (Rs. 809.95 crores),
Orissa (Rs.765 crores), Chhattisgarh (Rs.737.85 crores), Maharashtra (Rs. 691.61 crores), Tamil
Nadu (Rs. 414 crores) and Karnataka (Rs. 308 crores).
Table 2.1 Mineral Reserves of Andhra Pradesh

Sl. No. Minerals Andhra Pradesh (MT) India (MT) % of AP Reserves
1 Barytes 67.05 70.15 95.58
2 Ball Clay 7.5 13.90 54
3 Calcite 3.9 10.6 41
4 Limestone 30400 76446 40
5 Gold Ore 6.84 17.70 39
6 Bauxite 750 2525.33 30
7 Diamond 194990 Carats 1196154 16.3
8 Asbestos 0.25 2.3 11
9 Coal 13021.50 229962.28 6
10 Manganese 7 176.5 4
Source: http://www.aponline.gov.in (2009)
Nellore and Kurnool districts account for almost 15 percent each of the total mines in the state.
In terms of area (excluding fuel and minor minerals), the top five most mined districts in the
states are Nellore (14 percent), Nalgonda (11 percent), Kurnool and Kadapa (10 percent each)
and Guntur (9 percent) (CSE 2008). However, in terms of mineral revenue (excluding coal),
East Godavari leads the list followed by Prakasam and Kadapa (Figure 2.1).
Figure 2.1 District-wise Mineral Revenue in Andhra Pradesh (2006-07)
Source: Government of Andhra Pradesh (2008)

Table 2.2 District-wise Production of Minerals in Andhra Pradesh

Sl. No. Districts Major Minerals
1 Srikakulam -
2 Vizianagaram Manganese ore
3 Visakhapatnam Apatite,
4 East Godavari Ball Clay, Fireclay, Laterite
5 West Godavari Ball Clay, Fireclay
6 Krishna Limestone
7 Guntur Limestone
8 Prakasam Barytes
9 Nellore Mica
10 Chittoor -
11 Kadapa Asbestos, Barytes, Dolomite, Iron ore, Laterite, Limestone
12 Anantapur Dolomite, Iron ore, Limestone,
13 Kurnool Dolomite, Iron ore, Limestone
14 Mahbubnagar -
15 Ranga Reddy Limestone
16 Hyderabad -
17 Medak -
18 Nizamabad -
19 Adilabad Manganese ore, Limestone, Coal
20 Karimnagar Limestone, Coal
21 Warangal Coal
22 Khammam Barytes, Dolomite, Coal
23 Nalgonda Limestone
So far 1,727 mining leases for major minerals and 6,736 quarry leases for minor minerals
were granted under both private and public sectors. Coal, barytes, oil and natural gas are
exclusively mined by the public sector, which forms major mineral revenue to the state.
Limestone and dolomite are being exploited under public and private sector (Government
of Andhra Pradesh 2008). The state produces 80 to 90 MT of major minerals and 235
to 250 million cubic meters of minor minerals. Nearly 90 percent of the mines fall
under small sector, and the remaining 10 percent are under medium and large sectors.
The value of exports in the mineral and mineral products has also grown over the last
few years (Figure 2.2).
Figure 2.2 Value of Exports from Mineral and Mineral Products in Andhra Pradesh
In Andhra Pradesh, the total value of exports has increased from 12,400 crores in
2001-02 to 57,343 crores in 2007-08. Though mineral and mineral products have a
very small percentage in this total value, there is an increasing trend over the years. It
had a total value of 634 crores in 2001-02, which increased to 3,083 crores in 2006-07,
and slightly dropped to 2,711 crores in 2007-08.
2.2 Bauxite Mining in India

India is the fourth largest producer of bauxite in the world next only to Australia, China
and Brazil (US Geological Survey, 2009). The principal states with bauxite reserves
include Orissa (51 percent), Andhra Pradesh (21 percent), Gujarat (6 percent), Uttar
Pradesh (6 percent) and others (16 percent). The National Aluminium Company
(NALCO) is the leading producer of bauxite in India. Gumla District in Jharkhand,
Siridih, Kawardagh and Sarguja districts of Chhattisgarh and Koraput District of Orissa
are the major bauxite mining districts in India.
Figure 2.3 Bauxite Mines in India
Source: http://www.mapsofindia.com/maps/minerals/bauxite-mines-map.html, 21st Au-

gust, 09
2.3 Bauxite Mining in Andhra Pradesh

According to the Geological Survey of India (GSI, 1979) the bauxite deposits of Andhra
Pradesh and Orissa, referred as the East Coast Bauxite deposits of India have an estimated
reserve of around 2,000 MT. This is the largest bauxite reserve in the country, with
Orissa accounting for 51 percent and AP 21 percent of the total reserves of India. Andhra
Pradesh has an estimated reserve of nearly 600 MT (Table 2.3). The East Coast bauxites
of Andhra Pradesh and Orissa are bound by the north latitudes 170 47’ and 190 45’ and
the east longitudes 810 53’ and 830 30’. They are scattered over a length of 400 km and
a width of 30 km in an approximate NE-SW alignment in the southern part and north-
south in the northern part, which is in conformity with the general trend of the Eastern
Ghat hill ranges. The bauxite deposits of Andhra Pradesh are broadly divided into Araku,
Chintapalli and Gurtedu groups.
Table 2.3 Bauxite Deposits of Andhra Pradesh
Group Deposit Size Mine Area (Hectares)

(Million Tonnes)
Araku Group (Visakhapatnam)
Chittamgondi 28.5 152
Galikonda 14.5 61
Raktakonda 8.6 42
Total Araku 51.6 255
Chintapalli Group (Visakhapatnam)
Gudem 38.4 263
Jerrala 246.0 1,350
Sapparla 186.3 1,513.2
Total Chintapalli 470.7 3,126.2
Gurtedu Group
(East Godavari) 42.6 180
Total 564.9 3,561.2
Source: Geological Survey of India (1979)
Prior to the GSI exploration in the year 1971, the Directorate of Geology and Mining,
GoAP, examined and estimated small reserves of bauxite in AP (Indian Bureau of
Mines 1977). In April, 1975, the AP Industrial Development Corporation (APIDC)
contracted centre-owned Metallurgical Engineering Consultants (MECON) for a
pre-investment study for the exploitation of bauxite in the state. In 1987, MECON
prepared a feasibility report along with Al Union Research and Design Institute of
Aluminium Magnesium and Electrode Industry of former USSR. However, for multiple
reasons, exploitation never became a reality (Mitra 2000). In 2000, another initiative
was taken by the then Chief Minister (CM), Mr. N. Chandrababu Naidu, to exploit the
bauxite resources with a Dubai-based company. The company insisted on transfer of
land for mining to it, which implies amending of Land Transfer Regulation (LTR) 1 of
1970. Further, the Supreme Court of India, in Samata vs. State of AP case, gave a ruling
that a state-owned corporation can mine these areas. A large section of the tribals opposed
this plan and the government dropped the idea of mining.
According to Oskarsson (2009), serious obstacles to bauxite mining in the past were the
control of technology by a few multinational companies in the 1980s, along with lack of
financial resources. Later in the 1990s, a violent Maoist rebel movement gained strength
in the bauxite hills of AP, and since the mid to late 1990s, as money and technology
became available, the civil society awakened to the negative consequences of bauxite
mining; these became significant factors in delaying the projects, mainly through legal
activism. The present Congress Government is again promoting these projects and two
MoUs were signed.
Recently, the National Aluminium Company (NALCO), got the no objection certificate
from the Andhra Pradesh Government for grant of two bauxite mining leases in two
blocks of Visakhapatnam and East Godavari districts. These two blocks, with a combined
reserve of 80 MT of bauxite, were allotted to NALCO for its proposed 1.4 MT per
annum refinery in Andhra Pradesh. NALCO will invest around Rs.7,000 crore for setting
up the alumina refinery and other mining operations. The refinery project is likely to
come up in Visakhapatnam District, but the exact location is not decided. The refinery
is expected to be ready in 2011, and it is scheduled to be operational by 2013 (Business
Standard 2009). However, this part (NALCO Mining) is not included in our study as
this is a very recent phenomenon.
2.4 Mining in Forest Areas of Andhra Pradesh

According to the Ministry of Mines (2008), Government of India, the total forest land
diverted for mining in India has been estimated to be as high as 1,14,304.45 ha between
1980 and 2008. Chhattisgarh tops the list, followed by Andhra Pradesh and Orissa. In
Andhra Pradesh, about 18,178 ha of forest land was diverted for mining. This is the
second highest diversion of forest land for mining during this period in the country,
after Chhattisgarh. The forests in regions like Adilabad, Karimnagar and Warangal, which
hold both forest and mineral resources (CSE 2008), are under threat.
Figure 2.4 Mining in Forest Areas of Andhra Pradesh
Source: Centre for Science and Environment (2008)
Some of the most pristine forests in Andhra Pradesh are seen in the Eastern Ghats
in the areas bordering Khammam, West Godavari, East Godavari and Visakhapatnam
districts. Bauxite mining in Eastern Ghats will devastate the ecology of the area and coal
mining in Khammam has resulted in the clearance of vast stretches of deciduous forests
(Vagholikar, Moghe and Dutta 2003). According to Press Information Bureau (2009),
the Minister of State for Environment and Forest, Jairam Ramesh, informed the Rajya
Sabha in response to a question that the maximum amount of protected forest land had
been diverted for coal mining in Andhra Pradesh (12,709.62 ha), followed by
Chhattisgarh (12579.12 ha) and Madhya Pradesh (10,980.37 ha).
In October 2000, Samata sent a letter to the Regional Chief Conservator of Forests
(CCF), South Zone, raising concerns about the proposed opening of bauxite mining in
the following areas of Visakhapatnam District; they are Rakhthakonda in Anantagiri II
Reserve Forest (RF), S. Kota Range; Galikonda in Sunkarmetta RF, Araku Range;
Chittamgondi in Muliyaguda RF and Araku Range. The letter stress the importance of
these areas from the point of view of both wildlife and local communities, and also states
that these areas also form the catchment for the Machkund, Sileru, Gosthani and Sarada
rivers and bauxite mining will have tremendous impact on all these.
The present study area is rich with bauxite and forests. Therefore, this study will try to
find out how people of that area depend on forest for their livelihoods and how mining
will change this. The next chapter tries to map the existing livelihoods of the affected
communities – Is it sustainable or not? Once mining/refinery starts what will be the
source of livelihoods for these people, and how they will cope with the adverse situation.
CHAPTER - 3
LIVELIHOODS OF AFFECTED COMMUNITIES
3.1 Introduction
The conventional view on mining sees mineral reserves that can be mined profitably as
part of a country’s stock of natural capital, along with agricultural land, forests and other
natural resources (Davis and Tilton 2005). It was widely assumed that countries that
possess rich mineral deposits are fortunate. However, over the last few decades, a more
negative view of mining has emerged, that questions the positive relationship between
mineral extraction and economic development (Davis and Tilton 2005). Mining
profoundly impacts local communities in the form of jobs, migrant workers, land, water,
air and noise, loss of wildlife habitat, increased tax revenue, etc. The argument is that the
impact of mining on the livelihoods of the local communities is largely neglected. Often,
all the benefits accrue to the mining industry and its work-force, depriving the rest of
the population in the locality. This population bears only the costs, while the provision
of benefit is lopsided.
A livelihood is often conceptualized as “incomes in cash and in kind: as well as the social
institutions (kin, family, compound, village), gender relations, and property rights required
to support and sustain a given standard of living” (Ellis 1998, quoted in Chimhowu and
Hulme 2006). This includes the accessibility of, and benefits derived from, public services
like education, health, roads, water and related infrastructure. Livelihood approaches
involve a conceptual shift from analyzing rural people as smallholder farmers to a much
broader understanding (Murray 2002, quoted in Chimhowu and Hulme 2006).
Several frameworks have been proposed for the analysis of livelihoods. They include the
Sustainable Livelihoods Framework (SLF) (Carney, 1998,1999; Scoones, 1998),
the Framework for Thinking about Diverse Rural Livelihoods (Ellis 2000), Capitals and
Capabilities Framework of Bebbingotn (1999), and the United Nations Development
Programme’s (UNDP 1999) Sustainable Livelihoods Diamond. These frameworks have
different emphases, rather than fundamental differences. They all attempt to integrate
assets, constraints and human capabilities in a logical and comprehensive manner to
analyze the status, form, nature and condition of livelihoods over space and time
(Chimhowu and Hulme 2006). Among these frameworks, the SLF has been the most
popular, partly because of its robust analytical ability and also because of its widespread
promotion by donor agencies (Chimhowu and Hulme 2006).
According to the SLF, households make a living by using five types of assets / capital
(natural, physical, human, social and financial) in an environment influenced by
institutional and structural factors. It identifies vulnerability as a key factor that households
seek to manage. There are five key features, which make the framework very relevant.
Firstly, it views households as making a living in a variety of ways of which farming is
just one (Francis 2001; Murray 2002). Secondly, the framework sees land as just one
asset among a group of other assets. Thirdly, it places the interaction between the various
capitals within a broader policy environment. Fourthly, it allows investigating livelihood
dynamics in a given geographical and physical context (Murray 2002). Fifthly, the focus
on risk and vulnerability is appropriate.
As mentioned in the introduction chapter, bauxite mining and aluminum refineries

have not yet started in the study area. Though land acquisition has started in both the
refinery areas, people are still continuing with their existing livelihoods. Most of the
impact assessment studies go for a before and after comparison or with-without
comparison, considering a few control villages. However, this research has tried to study
the existing livelihoods of the community in the pre-mining / refinery period. It is
setting a baseline which can form the basis for a future impact assessment.
The main objectives of this section are:
areas.
(ii) To set a baseline study for future impact assessment.
The study is based on 12 villages in the mining and refinery areas7 . The basic features of
the villages under study have been presented in Table 3.1 and Table 3.2 provides some
basic data on demographic features of sample villages.
7
A detailed of selection of villages is given in the introduction chapter
Table 3.1 Key Features of Sample Villages

Villages Distance Total Social Total Livelihoods Infrastr- Electricity Water
from Popu- Composition House ucture
Mines/ lation holds in Village
Refinery (No)
(km)
Jindal Refinery
Cheedipalem 0.1 185 Tribal 55 Cultivation, Primary Available Surface
NTFP sale school, water
all
weathered
road,
ICDS
Chinakandepalli 1 205 BC 52 Cultivation Primary Available Piped
dominated wage labour school, all water
weathered
road, PDS
Addateega 0.5 114 Mixed 61 Cultivation, Primary Available Surface
(tribal wage labour chool, all water
dominated) sweathered
road,
ICDS
Rayavanipalem 1.5 145 Mixed 41 Cultivation Primary Available Surface
(Tribal wage labour School, water
dominated) all
weathered
road,
ICDS
Ammapalem 3 744 Mixed 209 Cultivation, Primary Available Surface
(tribal school, all water
dominated) weathered
farm labour road,
ICDS,
RMP
Mettapalem 3.5 77 Tribal 20 Cultivation, Primary Available Surface
wage labour school, water
all
weathered
road,
ICDS
Table 3.1 Contd...

Table 3.1 Contd...

Jindal Mining
Chettamgondi 0 68 Tribal 20 Podu Primary Available Streams
cultivation, school,
NTFP sale all
weathered
road,
ICDS
Barajola 0.5 180 Tribal 40 Podu Primary Available Streams
cultivation, school, all
NTFP sale, weathered
wage labour road,ICDS
Eugovasova 0.2 193 Tribal 42 Cultivation, Primary Available Streams
NTFP school,
collection ICDS
and sale
Anrak Refinery
Dharmavaram 0.5 157 BC 45 Cultivation, Primary Available Tube
wage labour school, well
all
weathered
road
Kottapalem 0 613 BC 150 Cultivation, all Available Tube
dominated wage labour weathered well
road,
ICDS,
PDS
G.Venkatapuram 0 1300 BC 362 Cultivation, UP school, Available Tube
dominated wage labour RMP, well
ICDS,
PDS
Source: Field Survey (2009)
All sample households are very near to the proposed mining and refinery sites. The
distance of the villages from the proposed sites ranges from 0 to 3.5 km. Villages under
Jindal Mining area are small hamlets and fully tribal villages. Villages near Anrak Refinery
area are dominated by Backward Caste (BC) population. In Jindal Refinery area, two
Table 3.2 Demographic Features of Sample Villages

Village Population Total Sample Households (No.)
House
holds
(No.)
Male Female Total SC ST OC BC Total
Jindal Refinery
Cheedipalem 85 100 185 55 1 18 0 0 19
Chinakandepalli 99 106 205 52 0 4 14 0 18
Addateega 59 55 114 61 0 14 3 2 19
Rayavanipalem 75 70 145 41 0 9 3 0 12
Ammapalem 374 370 744 209 8 42 11 1 62
Mettapalem 33 44 77 20 0 8 0 0 8
Jindal Mining
Chettamgondi 33 35 68 20 0 10 0 0 10
Barajola 87 93 180 40 0 20 0 0 20
Eugovasova 94 99 193 42 0 21 0 0 21
Anrak Refinery
Dharmavaram 75 82 157 45 0 0 13 0 13
Kottapalem 306 307 613 150 5 0 40 0 45
G.Venkatapuram 642 658 1300 362 2 0 104 1 107

villages are fully tribal, three villages have mixed composition, but dominated by tribal8 ,
and another village is BC dominated. In both the refinery areas farm cultivation and
wage labour are the major sources of livelihoods. On the other hand, in the mining
areas, podu cultivation and Non-Timber Forest Product (NTFP) collection and sale are
the major sources of livelihoods. Most of the villages have a primary school, all weathered
road and ICDS. Electricity is available in all the villages. Surface water and tube wells are
the major source of drinking water in the refinery areas and stream is the major source in
mining areas. G. Venkatapuram is the village with the maximum number of households
(362), with a population of 1,300. Chettamgondi and Mettapalem are two village /
hamlets with minimum number of households (20) with a population of 68 and 77
respectively.
3.2 Diversified Rural Livelihoods

Livelihood diversification is a survival strategy of the rural households in developing
countries, as agricultural activities are unable to provide sufficient means of survival
(Hussein and Nelson 1998). Ellis (1998) defines livelihood diversification as "the pro-
cess by which households construct a diverse portfolio of activities and social support
capabilities for survival and in order to improve their standard of living". Livelihood
diversification is normal for most people in majority of the rural areas of developing
countries in both Asia and Africa (Adams 1994; Schoonmaker Freudenberger 1994),
and non-agricultural activities are a critical component of such diversification. It has
been confirmed by many researchers that rural people not only specialise in crop and
fish production or livestock, but also depend on other activities (Dercon and Krishnan
1996; Ellis 1996; Unni 1996). This is reflected in all mining villages and control villages
(Figure 3.1 and 3.2)
In both the refinery areas wage income (Jindal 59 percent and Anrak 68 percent) is the
9
primary source of income of the sample households. This is followed by agriculture,
which also has the same percentage (Jindal 21 percent and Anrak 22 percent). Though
villagers devote a lot of time to agriculture, income from agriculture is not very high. Job
8
According to the MoU of AP Government with JSWHL, the refinery will come at a non-
scheduled area. Even though the present refinery area of Jindal is not a Scheduled Area, tribal
concentration is very high. There are Scheduled Areas in nine districts of AP notified under
Schedule five of the Constitution. In these nine districts, some of the adivasi villages are not
included. They are called non-scheduled Sub-Plan Villages. In the district of Visakhapatnam,
there are 98 revenue villages and in Vizianagaram, 170 revenue villages, which are non-scheduled
revenue villages.
9
Here primary income means the highest share of income coming from that source, for that
particular household.
and fuelwood collection is the third source of primary occupation in Jindal Refinery
area (both 7 percent each). Petty business and other occupations have a very small per-
centage (2 percent each). However, in the Anrak Refinery area, the percentage of other
sources of income is very less. Here livestock is also a primary source of income for some
households (2 percent). The percentage of job and business is very less.
Figure 3.1 Primary Occupation in Jindal Refinery Area
Figure 3.2 Primary Occupation in Anrak Refinery Area

The primary occupation in the mining area is entirely different from that of the refinery
areas. Here agriculture plays an important role and it is the primary source of income for
57 percent of the sample households. The second occupation is wage labour, which
mostly involves labour work at coffee board. Every year they work in the board for three
months. This is followed by employment. Here the percentage of job is very high in
comparison to the refinery areas. Most of the jobs are in AP Mineral Development
Corporation (APMDC). Income from NTFP and livestock are not major sources of
income in the mining villages. Though many households have cattle and poultry and
they collect NTFP most part of the year, income from that source is a secondary one.
Figure 3.3 Primary Occupation in Jindal Mining Area
3.2.1 Livelihoods Diversification: A Gender Dimension

Many livelihood diversification strategies are often gender specific. Literature confirms
that though women may undertake a similar wide range of diversified activities as men
(Chen 1989), in many contexts men are able to avail themselves of diverse opportunities
that are not open to women because of cultural constraints (Hussein and Nelson 1998).
This section discusses all the economic activities taking gender into consideration
(Table 3.3 and 3.4).
In Jindal Refinery area, majority of the active individuals devote their time (77 percent)
to agriculture (Table 3.3). This is followed by farm and non-farm labour and jobs. Petty
business has a very less percentage. Others include fuelwood collection for sale, driving,
cooking, laundering and livestock rearing. One important point in this table is that
women have equal participation in all the economic activities except jobs. The reason
for this is that majority of the jobs are given by Jindal and women have not received the
same.
Table 3.3 Primary Economic Activities10 of Individuals

Economic Jindal Refinery Area Jindal Mining Area Anrak Refinery Area
Activities Male Female Total Male Female Total Male Female Total
Agriculture 132 129 261 46 52 97 169 161 330
(38.94) (38.05) (76.99) (34.07) (38.52) (71.85) (43.22) (41.18) (84.40)
Farm Labour 11 16 27 15 14 29 0 0 0
(3.24) (4.72) (7.96) (11.11) (10.37) (21.48)
Wage Labour 11 10 21 0 0 0 15 18 31
(3.24) 2.95) (6.19) (3.84) (4.60) (7.93)
Job 19 0 19 6 3 9 1 2 3
(5.60) (0.00) (5.60) (4.44) (2.22) (6.67) (0.26) (0.51) (0.77)
Petty Business 0 2 2 0 0 0 3 3 6
(0.00) (0.59) (0.59) (0.77) (0.77) (1.53)
Others 4 5 6 0 0 0 13 6 19
(1.18) (1.47) (1.77) (3.32) (1.53) (4.86)
Total 177 162 339 67 68 135 201 190 391
(52.21) (47.79) (100.00) (49.63) (50.37) (100.00) (51.41) (48.59) (100.00)
In Jindal Mining area, the majority of the workforce is engaged in agriculture

(71.85 percent), followed by farm labour and job. Non-farm labour work is absent here.
Unlike Jindal Refinery area, the percentage of woman participation here is equal in all
the economic activities including job. Agriculture plays an important part also in Anrak
Refinery area (84.40 percent), followed by non-farm labour and others. Others include
laundering, driving, fuelwood collection and livestock rearing. The percentage of job is
very less here. Here also women have equal participation in most of the works.
10
Here primary activity is majority of time devoted to that particular economic activity.
Table 3.4 Secondary Economic Activities of Individuals

Economic Jindal Refinery Area Jindal Mining Area Anrak Refinery Area
Activities Male Female Total Male Female Total Male Female Total
Agriculture 3 2 5 0 0 0 7 5 11
(1.17) (0.78) (1.95) (2.11) (1.51) (3.32)
livestock 2 1 3 0 0 0 4 2 6
(0.78) (0.39) (1.17) (1.21) (0.60) (1.81)
Wage Labour11 99 104 203 6 5 11 155 152 307
(38.67) (40.63) (79.30) (4.69) (3.91) (8.59) (46.83) (45.92) (92.75)
Job 7 0 7 6 0 6 2 0 2
(2.73) (0.00) (2.73) (4.69) (4.69) (0.60) (0.60)
Business 3 2 5 0 0 0 0 1 1
(1.17) (0.78) (1.95) (0.30) (0.30)
NTFP 15 16 31 51 59 120 0 0 0
Collection (5.86) (6.25) (12.11) (39.84) (46.09) (93.75)
Others 1 1 2 1 0 1 3 0 3
(0.39) (0.39) (0.78) (0.78) (0.78) (0.91) (0.91)
Total 130 126 256 64 64 128 171 160 331
(50.78) (49.22) (100.00) (50.00) (50.00) (100.00) (51.66) (48.34) (100.00)
A look at the secondary occupations show that in Jindal Refinery area, wage labour is the
second major economic activity (nearly 80 percent) followed by NTFP collection. Here
NTFP is fuel wood collection. Here also women have equal share in all the economic
activities except job. All these jobs are given by Jindal and as now, they are getting only
stipend; people take it as their secondary economic activity. In Jindal Mining area,
NTFP collection is the second major economic activity (94 percent) followed by wage
labour. Here also women have equal participation except for job. In Anrak Refinery
area, wage labour is the secondary occupation (93 percent) followed by agriculture.
Here also women have an equal role to play. This explains that in all the three study
areas, women are equally active as their male counterparts. The next section shows that
literacy rate is very low among women in all these three study areas. As a result, most of
them do not have a job. However, they are playing a major role in all other economic
activities.
11
This includes both farm and non-farm labour.
3.3 Mining and Livelihood Assets

The livelihood approach is concerned first and foremost with people. According to this,
people require a range of assets to achieve positive livelihood outcomes; no single category
of assets, on its own, is sufficient to yield all the many and varied livelihood outcomes
that people seek. The framework identifies five core asset categories or types of capital
upon which livelihoods are built. The current understanding of poverty places considerable
emphasis on ownership or access to assets that can be put to productive use as the
building blocks by which the poor can construct their own routes out of poverty (Ellis
and Mdoe 2003). Therefore, it is interesting to study the existing livelihoods of people,
on the following five types of capital.
3.3.1 Human Capital

In the livelihood framework, human capital is taken as a livelihood asset, or as a means
of achieving livelihood outcomes. It represents the skills, knowledge, ability to labour
and good health that together enable people to pursue different livelihood strategies and
achieve their livelihood objectives. Human capital is required to make use of any of the
other four types of assets. Therefore, it is necessary, though not sufficient on its own, for
the achievement of positive livelihood outcome. Many people regard ill health and/or
lack of education as core dimensions of poverty and thus, overcoming these conditions
may be one of their primary livelihood objectives (DFID 1999). Table 3.5 shows the
educational status of the sample households and table 3.6 shows the status of health of
people in the study areas.
The literacy rate is very low among women in all these three areas. Illiterate percentage
varies from 57 percent to 64 percent (Table 3.5). Among men, it is 39 to 45 percent.
Further the percentage of education in men is more than that of women in all categories,
except in the primary education in Anrak Refinery area. The percentage of those educated
above graduation is very low among women in both the refinery areas, and zero in Jindal
Mining area. As Jindal Mining area, covers tribal hamlets in the forest area, the percentage
of female illiteracy is comparatively high. However, the percentage of male illiteracy is
much less in these areas. Both the refinery areas show a more or less same trend.
Table 3.5 Educational Status of Sample Households

Educational Jindal Refinery Jindal Mining Anrak Refinery
Status Male Female Male Female Male Female
Illiterate12, 13 40.23 60.96 38.46 63.64 44.30 56.68
Literate
(non-formal) 0.38 1.20 0.96 1.01 2.93 2.28
Literate below
primary 9.20 8.37 17.31 16.16 11.73 7.49
Primary 13.41 8.76 18.27 9.09 8.47 14.33
Middle 18.01 11.55 7.69 6.06 14.01 11.07
Secondary 10.34 7.17 12.5 4.04 13.68 6.51
Graduation and
above 8.43 2.39 4.81 0.00 4.89 1.63
Total 100.00 100.00 100.00 100.00 100.00 100.00
Table 3.6 Status of Health of the People in Study Areas

Study Areas Households facing Treatment Received
Health Problems
Jindal Refinery 22.46 100.00
Jindal Mining 84.31 95.35
Anrak Refinery 61.45 100.00
12
The working definition of literacy in the Indian census since 1991 is: the total percentage of
the population of an area, at a particular time, aged seven years or above, who can read or write
with understanding. Here the denominator is the population aged seven years or more. This
study consider this definition.
13
According to the 2001 Census, the literacy rate of Vizianagaram District is 51.82%, with a
male literacy rate of 63% and female literacy rate of 40.73%. The literacy rate of Visakhapatnam
District is 59.45%, with a male literacy rate of 68.84% and female literacy rate of 49.99%. In
case of rural areas only 35.21% and 36.78% of women are literate in both the districts respec-
tively. AP has a total literacy rate of 61.11%, with 70.85% male literates and 51.17% female
literates.
The percentage of households facing health problems is very high in Jindal Mining area
(84.31 percent) followed by the households in Anrak Refinery area (61.45 percent).
This percentage is 22.46 in Jindal Refinery area (Table 3.6). In both the refinery areas,
all households are receiving treatment. However, in the mining area, two to three
households have not received treatment. The reasons they cited are lack of money and
no facilities near their village. In the mining area, the source of treatment is public (44
percent) followed by private (28 percent) and traditional (16 percent). However, in
both the refinery areas, the main source of treatment is private (61 percent in Jindal
Refinery and 73 percent in Anrak Refinery) followed by public (35 percent in Jindal
Refinery and 24 percent in Anrak Refinery). Few households also have access to both
private and public source of treatment.
3.3.2 Social Capital

In the context of the sustainable livelihood framework, social capital is taken to mean
the resources upon which people draw in pursuit of their livelihood objectives. These
are developed through networks and connectedness, membership of more formalized
groups and relationships of trust, reciprocity and exchanges that facilitate co-operation,
reduce transaction costs and may provide the basis for informal safety nets amongst the
poor. They are all inter-related.
In all the study areas, 90 to 95 percent of sample households are members of Public
Distribution System (PDS) (Table 3.7). The second highest membership is in
Development of Women and Children in Rural Area (DWCRA). It varies from 59 to
67 percent. Old age pension takes a third place. In both the refinery areas, households'
involvement in Anganwadi is very less. However, this is relatively higher in the mining
areas. Most of the households stated that they have benefitted from the programmes
and have not faced any difficulties. They are aware about the programmes in which they
are members.
Table 3.7 Membership in Formal Institutions
Formal Institutions Jindal Refinery Jindal Mining Anrak Refinery
PDS 95.65 90.20 93.98
DWCRA 62.32 58.82 67.47
Anganwadi 1.45 19.61 0.40
Old Age Pension 19.57 17.65 10.84

Table 3.8 Trust in Lending and Borrowing

Study Areas Trust Trust in Matters of Lending
and Borrowing
People Careful in Do trust Do not Do not No
can be dealing trust know/ answer
trusted with people not sure
Jindal Refinery 24.26 75.74 61.59 37.68 0.72 0.00
Jindal Mining 58.82 41.18 82.35 3.92 13.73 0.00
Anrak Refinery 86.67 13.33 89.70 9.70 0.61 0.00
Majority of the people in Jindal Mining area and Anrak Refinery area believe that most
people can be trusted (Table 3.8). However, in Jindal Refinery area, people are too
careful in dealing with other people. In terms of trust in lending and borrowing, they are
comparatively better. In the other two areas, the people greatly trust others in matters of
lending and borrowing.
3.3.3 Natural Capital

Natural capital can be defined as the stock of natural resources and environmental as-
sets, including water, soils, air, flora, fauna, minerals and other natural resources. For
rural people, natural capital is very important because they derive all or part of their
livelihoods from farming, fishing and collecting forest products.
All the study areas are naturally very rich. In Jindal Mining area, all the households have
agricultural land. Nearly 94 percent of them are practicing podu and 33 percent are
using forest land for cultivation. All households except a few are collecting NTFP from
forests. However, their income from NTFP collection is not a major source, and
agriculture is the major source of income. In both the refinery areas also most of the
households have agricultural land. They do not practice podu. In Jindal Refinery area,
few households (2.90 percent) use forest land for agricultural purpose. As the forest is
close to their village, they collect fuelwood from the forest and sell it. This percentage is
nil in Anrak Refinery area as they do not have any nearby forest. As majority of the
households in all the study areas have agricultural land, it is important to know the size-
class distribution of the households14.
14
Large Farmers (>10 acres), Medium Farmers (5.1 to 9.9 acres), Small Farmers (2.51 to 5
acres), Marginal Farmers (0.1 to 2.5 acres), Landless (0 acres).
Table 3.9 Access to Natural Capital

Study Areas HHs having HHs using HHs HHs
Agricultural Forest Land Practicing Collecting
Land Podu NTFP
Jindal Refinery 86.96 2.90 0.00 13.77
Jindal Mining 100.00 33.33 94.12 98.03
Anrak Refinery 90.36 0.00 0.00 0.00
Table 3.10 Landholding in Sample Villages (% of Households)

Study Area Large Medium Small Marginal Landless Total
Farmers Farmers Farmers Farmers HHs
(%) (%) (%) (%) (%)
Jindal Refinery 1 15 30 74 18 138
(0.72) (10.87) (21.74) (53.62) (13.04) (100.00)
Jindal Mining 16 18 14 2 0 51
(33.33) (35.29) (27.45) (3.92) (0.00) (100.00)
Anrak Refinery 0 0 11 139 16 166
(0.00) (0.00) (6.63) (83.73) (9.64) (100.00)
In Jindal Mining area, all the households have agricultural land. The percentage of medium
farmers is highest (35.29 percent), followed by large farmers (33.33 percent) and small
farmers (27.45 percent). Therefore, their income from agriculture is also very high unlike
the refinery areas, where the primary source of income is wage labour. Marginal farmers
have a very less percentage (3.92 percent). In both the refinery areas, the percentage of
marginal farmers is the highest. In Anrak Refinery area, not a single sample household
has agricultural land more than 5 acres. Even small farmers have a very less percentage
(6.63 percent). In Jindal Refinery area, this percentage is comparatively higher (21.74
percent). They also have a few medium farmers and a single large farmer.
Table 3.11 Important Common Property Resources (CPRs)

Study Area Jindal Refinery Jindal Mining Anrak Refinery
Major CPRs Pond, Tamarind, Pond, Canal, Tamarind, Pond, Canal,
Fuel wood Mango, Amla15 , Jackfruits, Tamarind
Karaka16 , Ginger,
Broomsticks, Honey,
Shikakai, Bamboo,
Soapnut, Jeelugu, Cashew,
In both refinery areas, pond and tamarind are the major CPRs. Villages use the pond
water for agricultural purpose and also for bathing and washing. Tamarind is used for
household consumption and for selling. In Jindal Refinery area the people also collect
fuelwood for daily cooking purposes, and they sell a part of it. In Anrak Refinery area,
they have canals and they use that water for agricultural purposes. On the other hand, as
Jindal Mining is in a forest area, people have access to a number of NTFPs (Table 3.11).
They use them both for consumption and selling purposes.
In Jindal Refinery area, surface water is the major source of drinking water followed by
piped water (Table 3.12). Some households use both (14.39 percent). In Anrak Refinery
area, tube well is the major source of drinking water followed by surface water and a
combination of piped water and tube well. However, in Jindal Mining area, they are
dependent on streams. Majority of the households use a combination of piped water
and streams, followed by only streams.
3.3.4 Physical Capital

Physical capital comprises the basic infrastructure and producer goods needed to support
livelihoods. The components of infrastructure which are usually essential for sustainable
livelihoods are: affordable transport; secure shelter and building; adequate water supply
and sanitation; clean, affordable energy; and access to information. Infrastructure such
as roads, rails and telecommunications are important for the integration of the remote
areas where many of the poor live.
15
Indian gooseberry (Emblica officinalis)
16
(Corynocarpus laevigatus)
Table 3.12 Sources of Drinking Water
Sources Jindal Sources Jindal Sources Anrak

Refinery Mining Refinery
Surface Water 50.76 Piped Water 43.14 Tube Well 66.07
& Streams
Piped Water 21.21 Streams 33.33 Surface Water 15.48
Piped & Surface 14.39 Piped Water 9.80 Tube Well & 7.74
& Open Well Piped
Tube Well 5.31 Others 13.78 Piped Water 4.76
Surface & Open 5.30 - - Tube Well, 3.59
Well Open Well &
Lake
Open Well 3.03 - - - -
Total 100.00 - 100.00 - 100.00
Table 3.13 Housing Status in Study Area

Study Areas HHs Type of House Number of Rooms
owning
a House Thatched Pucca Semi 1 2 >2
(%) Pucca
Jindal Refinery 97.83 34.07 4.44 61.48 67.39 13.77 18.12
Jindal Mining 100.00 9.80 84.31 5.88 50.98 47.06 1.96
Anrak Refinery 100.00 16.3 31.3 52.4 37.3 50.6 11.8
Most of the sample households own a house except a few households in Jindal Refinery
area who live in rented houses (Table 3.13). In the refinery areas, many households are
pucca as they were constructed after getting compensation from the companies. In the
mining villages, the majority households have semi-pucca houses. In all the houses, the
number of rooms varies between one and two. Only in the refinery areas, a few households
have more than two rooms. Apart from house, the households have also other physical
assets (Table 3.14). In both the refinery areas, many households have cycle, fan, watch,
almirah and TV. In Jindal Mining area, all the households have agricultural assets. This
percentage is also high in Anrak Refinery area (65.66 percent). However, in Jindal Refinery
area, the households do not have agricultural assets.
Table 3.14 Physical Assets
Particulars Jindal Refinery Jindal Mining Anrak Refinery

% of Present % of Present % of Present
HHs Value (Rs.) HHs Value (Rs.) HHs Value (Rs.)
Cycle 36.96 75,850 0.00 0.00 50.00 2,62,206
Fan 44.93 61,950 5.88 2,800 64.46 1,31,400
Watch 19.57 3,900 25.49 5,050 43.98 13,715
Almirah 18.12 59,200 5.88 10,000 24.70 1,28,750
TV 39.86 3,25,100 21.57 94,600 29.52 4,24,600
Motorcycle 7.97 3,11,000 1.96 35,000 6.63 9,88,500
Fridge 0.72 7,000 0.00 0.00 4.82 1,60,000
Agricultural Assets 1.45 6,10,000 100.00 75,970 65.66 96,200
3.3.5 Financial Capital

Financial capital denotes the stocks and flows of financial resources that people use to
achieve their livelihood objectives. There are two main sources of financial capital. They
are available stocks and regular inflows of money. Savings are the preferred type of financial
capital. They can be held in several forms like cash, bank deposits or liquid assets such as
livestock and jewellery. Financial resources can also be obtained through credit providing
institutions. Regular inflows of money include pensions, or other transfers from the
state, and remittances.
Table 3.15 Mean Household Income of Villages
Study Areas Mean HH Mean Per capita Mean HH size

Income (Rs.) Income (Rs.) (No.)
Jindal Refinery 52214.49 13343.70 3.91
Jindal Mining 61708.63 14176.31 4.35
Anrak Refinery 44860.58 11493.78 3.90
Table 3.16 The Herfindahl Index for Income Diversification

Study Areas Herfindahl Index Diversification
Jindal Refinery 0.33 0.66
Jindal Mining 0.30 0.69
Anrak Refinery 0.38 0.61
The mean household income and mean per capita income is very high in the mining
areas (Table 3.15). As all the households have agricultural land, practicing podu, collecting
NTFP, and three months of regular wage labour job in the coffee estate increases their
income. On the contrary, in the refinery areas, many of them are small farmers and
majority of their income comes from wage labour. The mean household size is small in
the refinery areas compared to the mining areas. With the help of Herfindahl Index,
income diversification is calculated (Table 3.16).
It is seen that the households of Jindal Mining area have highly diversified livelihoods,
followed by Jindal Refinery and Anrak Refinery. On an average, all the three areas have
diversified source of income and not a single occupation plays a monopoly role.
In all the three study areas, majority of monthly expenditure goes to food (65 to
76 percent) followed by health and adult education (Table 3.17). However, the difference
between expenditure on food and health expenditure is very high. Children education,
travel for work, travel for education and recreation have a very small percentage. As the
major percentage of household expenditure is going to food, it is important to know
whether the households have food security or not (Table 3.18).
Table 3.17 Household Expenditure (Percentage)
Study Areas Food Children Adult Travel Travel Health Recrea- Other Total
Edu. Edu. for for tion
work Edu.
Jindal Refinery 76.18 1.91 5.70 0.55 0.99 7.34 2.95 4.38 100.00
Jindal Mining 64.64 1.31 4.74 0.76 0.85 7.11 5.47 15.12 100.00
Anrak Refinery 74.25 2.66 5.01 1.80 1.42 7.55 2.25 5.06 100.00
Table 3.18 Food Security17

Study Area <3 3-6 6-9 9-12 >12 No Total
Months Months Months Months (surplus Food
(%) to sell) Security
Jindal Refinery 8 6 12 30 1 81 138
(5.80) (4.35) (8.70) (21.74) (0.72) (58.70) (100.00)
Jindal Mining 0 1 12 34 4 0 51
(0.00) (2.00) (23.5) (66.7) (7.8) (0.0) (100.00)
Anrak Refinery 6 27 40 45 13 33 166
(3.61) (16.27) (24.10) (27.11) (9.03) (19.88) (100.00)
In Jindal Refinery area, more than half of the households do not have food security
(Table 3.18). Only 22 percent of households have food security for nine to twelve months.
As most of the farmers are marginal, they do not have enough crop produce from their
field. Income from wage labour is the remaining important option for them. In Jindal
Mining area, most of the households have food security from nine to twelve months. In
Anrak Refinery area, twenty percent of the households do not have food security. Many
of them have three to twelve months of food security.
17
Food security refers to the availability of food and one’s access to it. A household is considered
food secure when its occupants do not live in hunger and fear of starvation.
Table 3.19 Ownership Distribution by Households of Selected Livestock

Ownership Range Study Locations
Jindal Refinery Jindal Mining Anrak Refinery
Cattle
0 85.51 33.33 92.77
1-5 13.77 50.98 7.23
More than 5 0.72 15.69 0.00
Buffaloes
0 84.78 90.20 40.96
1-5 14.49 9.80 59.04
More than 5 0.72 0.00 0.00
Goats
0 97.83 62.75 96.39
1-5 0.72 35.29 2.41
More than 5 1.45 1.96 1.20
Sheep
0 98.55 84.31 98.19
1-5 1.45 9.80 0.00
More than 5 0.00 5.88 1.81
Poultry
0 99.28 9.80 89.16
1-5 0.00 52.94 6.02
More than 5 0.72 35.29 4.82
The patterns of livestock holding found in the three areas are shown in Table 3.19.
In the refinery areas, relatively few households own cattle, goats, sheep and poultry.
In Anrak Refinery area, nearly 60 percent of the households have buffaloes. In Jindal
Refinery area, for all the households, the percentage of livestock ownership is very less.
In the mining area, the percentage of livestock holding is high (except buffaloes and
sheep). Almost all the households have poultry. In the study areas, especially in refinery
areas, as the households are not food secure, they do not have enough livestock, they
borrow in order to cope with their situation. Table 3.20 shows the borrowing situation
in the study areas.
Table 3.20 Sources of Borrowing (Percentage of Households)

Sources Jindal Refinery Jindal Mining Anrak Refinery
Self Help Groups (SHGs) 46.67 25.00 50.49
Bank and SHGs 22.67 0.00 6.80
Private Lenders and SHGs 0.00 0.00 16.50
Bank 16.00 0.00 6.80
Private Lenders 8.00 75.00 8.74
Others 6.66 0.00 10.67
Total 100.00 100.00 100.00
Households having debt 52.17 35.29 58.79
Households Borrowed over
the last one year 54.35 15.69 65.06
As the mean household income is less in the refinery areas, the percentage of households
having debt and the percentage of households borrowed over last one year is high in
both the places. In the mining area, this percentage is comparatively less. In Jindal Refinery
area, the major source of borrowing is from Self Help Groups (SHGs) followed by both
bank and SHGs, and only bank. In Anrak Refinery area, the primary source is SHGs,
followed by a combination of private lenders and SHGs, and private lenders. However,
in the mining area, the majority of the borrowing (75 percent) is from private lenders
followed by SHGs (25 percent). In Jindal Refinery area, the majority of the borrowings
are for agricultural purpose and household expenditure. In Jindal Mining area, it is
purchase of residential land or building. In Anrak area, it is for agricultural purpose
followed by purchase of residential land or building, debt repayment, non-farm business,
medical purpose and marriage.
3.4 Conclusion
As the previous section shows, the households in the refinery areas are not rich in any
other form of capital except natural capital. Most of the households have agricultural
land and their livelihoods revolve around that piece of land. As income from agriculture
is not enough, they work as wage labour. In spite of that, they do not have food security
for most of the year. They are illiterate and without any skill. Once the refinery starts
and these people are displaced what will happen18 ? Definitely all of them will not be
absorbed by the company. Cash compensation will go for a year or two. What is the next
step? This will result in migration, which is not a permanent solution. Will the company
do something to help the people to cope with this situation? These are some unanswered
questions.
The situation in Jindal Mining area is different. Here all the households have agricultural
land, their primary income is from agriculture and they have food security for a year.
This is a forest area and people collect and sell NTFP to add to their household income.
They are comparatively rich in all forms of capital. Land acquisition has not started in
this area. However, once it starts where will these people go? They will lose their
agricultural land and the forest will be destroyed. The streams will get dry. What will be
their new source of livelihoods?
Uprooting people in the name of development is going on everywhere. These people are
voice less and they lose everything. Only the concerned company with the help of the
government should try their best to help them to cope with this and start a new livelihood,
which should be sustainable. Only time will decide if bauxite mining and alumina refinery
will bring a sustainable livelihood to the people of Andhra Pradesh.
18
Land acquisition has started in both the refinery area, the next chapter discusses this.
CHAPTER - 4
BAUXITE MINING AND DISPLACEMENT
4.1 Mining Induced Displacement

Mining-Induced Displacement and Resettlement (MIDR) poses major risk to sustainable
development (Downing 2002). Cernea (2000) defined displacement as not only the
physical eviction from a dwelling, but also the expropriation of productive lands and
other assets to make possible an alternative use. Asian Development Bank (1998) defined
Affected People as those who stand to lose, as a consequence of a project, all or part of
their physical and non-physical assets, including homes; communities; productive lands;
resources such as forests, rangelands, fishing areas, or important cultural sites; commercial
properties; tenancy; income-earning opportunities; and social and cultural networks
and activities. Rehabilitation refers to restoring the incomes, livelihoods and social systems
of the displaces to at least the level of their pre-project status.
The development-induced displacement literature on mining is small compared to dam

and other development projects. Stanley (2004) has given two reasons for this. Firstly,
mining causes limited displacement compared to large infrastructure projects. Secondly,
the displacement caused by such projects is often indirect; therefore, they are less examined
in the literature. Downing (2002) report offers an overview of mining-induced
displacement and rehabilitation issues, and also suggests ways to prevent the
impoverishment of the displaced people.
No global survey has assessed the scale of MIDR (Downing 2002). Cases are highly
visible in Papua New Guinea, Indonesia, Philippines, Peru, Venezuela, Suriname, Guyana,
Argentina, Chile, Honduras, Tanzania, Botswana and Namibia. According to Downing
(2002), mining displaced 2.55 million people in India between 1950 and 1990. The
displacement may increase to a large extent as national mining policies are liberalized; as
companies opt for open-cast mining, and as the rural population density increases
(Downing, 2002). Mining projects, particularly coal, have been among the biggest
displacing agents in India. The Major coal companies displaced as many as 32,751
families in 1981-85; and Singrauli has displaced about 50,000. Until the 1960s, focus
was on underground mines, due to which there were Project Affected Persons (PAPs),
but relatively few Displaced Persons (DPs). Displacement by coal mines has now increased
because with the rise in the demand for low grade coal for thermal plants and the need
to raise its production rapidly, the focus since 1970 has been on opencast mines; these
displace a large number of people (Murican et al, 2003).
In displacement literature, the potential risks threatening sustainability are: joblessness,

homelessness, marginalization, food security, loss of common lands and resources,
increased health risks, social destruction (Cernea 1998), loss of civil and human rights
(Downing 1998) disruption of formal educational activities and loss of access to basic
public services (Mathur and Marsden 1998).
In case of bauxite mining in Andhra Pradesh, displacement has not yet started in both
Jindal and Anrak mining areas. However, in the refinery areas, it has started since the
year 2007. The main objective of this chapter is to understand the displacement scenario
in Jindal and Anrak refinery areas, the Resettlement and Rehabilitation (R and R)
packages given by both the companies, and to study communities’ perception of the
same.
4.2 Land Requirement of Jindal and Anrak19

According to the Environmental Impact Assessment (EIA) Report of Jindal, the total
land requirement for the proposed project is estimated to be around 545 ha (1350
acres). According to the report, only 15 percent of the total land is private land (Table
4.1). The report says that all attempts were made to reduce the extent of private land.
However, some acquisition of private land has become unavoidable as they lie in between
the government lands. According to the EIA Report of Anrak Alumina Limited (AAL),
they have identified 560 ha for locating the plant. Here, the percentage of government
land is very less (6.5) and private land is very high (93.5) (Table 4.1).
According to information from the District Revenue Officer, Vizianagaram, the authorities
of M/s Jindal South West Aluminum Limited., Visakhapatnam, have submitted a
requisition for alienation of land measuring 1127.76 acres in Musidipalli, Cheedipalem,
Chinakandepalli, MB Vara and Kilthampalem villages of S. Kota Mandal for establishment
20
of 1.4 million TPY Alumina Refinery Complexes .
19
As land acquisition has not yet started in the mining areas, this chapter concentrates only on
the refinery areas of Jindal and Anrak.
20
We do not have the same information from the District Revenue Officer of Visakhapatnam
District for the refinery complex of Anrak.
Table 4.1 Land Requirement of Jindal and Anrak Refinery
Jindal Particulars Area (Acres) Anrak Particulars Area (Ha)

Alumina Refinery and 750 Alumina Refinery 200
Co-generation
(including storages and
green belt)
Residue Disposal Area 500 Red Mud Pond 80
and Ash Pond
Township and
Miscellaneous 50 Aluminum Smelter 90
Railway Lines 50 Secured Land fill for SPL 30
Total 1350 Co-generation Plant 40
Green Belt 80
Roads and Infrastructure 40
Total 560
Private Land 170 (15) Private Land 523 (93.5)
Government Land 1180 (85) Government Land 37 (6.5)
Source: Environmental Impact Assessment Report (2007)

Note: Figures in parentheses shows percentage to total.
Table 4.2 Land Details given by JSW
Name of the Government Land Proposed Assigned D. Total

Village Patta lands
Dry Wet Total proposed
Musidipalli 23.57 — 23.57 34.78 58.35
Cheedipalem 33.38 — 33.38 135.47 168.85
Chinakandepalli 29.71 22.53 52.24 136.62 188.85
M.B. Vara 54.73 22.72 77.45 253.05 330.50
Kilthampalem 10.73 11.17 21.90 359.30 381.20
Total 152.12 56.42 208.54 919.22 1127.76
Source: District Revenue Office, Vizianagaram (2008)

The Spl. C.S. and Chief Commissioner of Land Administration (CCLA), Hyderabad,
in his letter dated 26.2.2007, stated that “In principle, allocation of the land for the
project by the Government is possible at this stage. However, the actual alienation will
have to be based on detailed examination of the lands item wise, its legal position and
modalities; and certain bits may have to be excluded due to Supreme Court guidelines
on alienation of the tank bed lands, etc.” Finally, the government has sanctioned 1017.71
acres to JSW Limited for their refinery21 .
Table 4.3 Final Land given to Jindal

Name of the Government Land Proposed Assigned D. Total
Village Patta lands
Dry Wet Total proposed
Musidipalli 23.57 0 23.57 34.78 58.35
Cheedipalem 33.38 0 33.38 135.47 168.85
Chinakandepalli 29.71 0 29.71 84.07 113.78
M.B. Vara 53.15 0 53.15 253.05 306.2
Kilthampalem 10.41 0.82 11.23 359.30 370.53
Total 150.22 0.82 151.04 866.67 1017.71
Source: District Revenue Office, Vizianagaram (2008)
4.3 Asset Acquisition in the Sample Villages

In the Jindal Refinery Area, out of the 138 sample households, 83 households
(60.14 percent) are affected. Almost all the households except one lost their recorded
cultivated land. The percentage of other assets such as homestead land and trees is very
less. None of the sample households lost their house, cattle shed or open well. In Anrak
refinery area, out of the 166 households, 153 (92.17 percent) of the households are
affected. Nearly 90 percent of them lost their recorded cultivated land. Half of the
affected households (52.94 percent) lost their cattle shed. The percentage of affected
households losing trees (49.67 percent), homestead land (31.37 percent), house (18.95
percent) and open well (15.69 percent) is also high. Percentage of households losing
homestead land is very less compared to the percentage of households losing cultivated
land. The pattern seems clear that the authorities want to minimize the acquisition of
21
They have kept making various changes to this even though it was claimed to be the
final land proposed for Jindal.
household land. The AP R&R Policy gives land for land in the plain area if household
land is acquired. In tribal areas land for land is given if any land is acquired. So a good
tactic for the authorities is to cut down on household land acquired in the plain area and
they do not have to bother about rehabilitation.
Table 4.4 Details of Asset Acquisition
Category of Assets Jindal Refinery Anrak Refinery

Recorded Cultivated Land 82 (98.80) 138 (90.20)
Recorded Homestead Land 3 (3.61) 48 (31.37)
Encroached Government Land 8 (9.64) 4 (2.61)
House 0 29 (18.95)
Cattle shed 0 81 (52.94)
Open Well 0 24 (15.69)
Trees 5 (6.02) 76 (49.67)
Total affected Households 83 (100.00) 153
Notes: This table will not add up to hundred as there are few households who have lost
more than one asset.
The percentage of households losing their cultivated land is very high in both the study
areas (Table 4.4). Expropriation of land removes the main foundation upon which people’s
productive systems, commercial activities and livelihoods are constructed. This is the
principal form of recapitalization and pauperization of displaced people through loss of
both physical and man-made capital (Cernea 1997). For analyzing the nature of
landholding in both pre and post displacement stages, legal landholding was taken as
the sole variable. After land acquisition, the percentage of households with land reduced
drastically in both refinery areas (Table 4.5). The average legal land holding of the displaced
people also reduced in both the areas. The percentage change in total area and the
average size is also seen to be negative. Therefore, it is concluded that there is a drastic
change in the land system of the affected households.
Table 4.5 Landholding of Sample Households in the Refinery Area

Area Total No of HH with Land Average Area Per Cent
No of (in acre) Change in
HH Before After
Number Area Number Area Before After Total Average
Area Size
Jindal 138 120 324.83 75 160.94 2.70 2.14 -50.45 -20.74
Refinery (100.00) (86.96) (54.35)
Anrak 166 150 179.51 28 28.00 1.19 1.00 -84.40 -15.96
Refinery (100.00) (90.36) (16.87)

This can be further supported by another explanation – by taking changes in land of
different size-class households into consideration. Here, all the households are classified
into five different economic classes based completely on their landholdings. A detailed
analysis of changes in land of different size-class households is given in table 4.6. It
shows the total land possessed by various categories of households before and after
displacement. It is observed that the percentage of landless households increased drastically
in both the refinery areas. Similarly the percentage of marginal, small and medium
farmers has reduced. It is also observed that the percentage of large farmers is very
insignificant in both the areas, and remains the same. In the absence of a land for land
policy, the landholding of the people has drastically reduced.
4.4 Compensation Package of Jindal and Anrak

The usual approach to involuntary displacements has been to offer compensation to the
displaced. It is based on the value of the land at the time of notification, which is much
smaller than the value at the time of dispossession. Further, because of intervention
from middle men, the amount of money that reaches the disposed is lesser than the
price of replacement land (Nathan 2009). Jindal and Anrak both have different
compensation packages for the affected people (Table 4.7).
It is seen that both the companies are offering monetary compensation for the agricultural
land acquired. In case of Jindal, the compensation amount is Rs. 2,00,500, while Anrak
gives Rs. 4,05,000. Affected households are promised one job per patta. Other
compensations include a share in the company in case of Jindal area, while Anrak has
promised to give a ration card and two milch animals. For recorded homestead land and
house, Jindal has given monetary compensation, while Anrak has promised them to give
a resettlement colony. For cattle shed, Jindal is giving money, whereas Anrak has promised
land. For open wells and trees, both the companies are giving monetary compensation.
Table 4.6 Change in Land of Different Size-Class Household
Area Household Before Displacement After Displacement

Category
No. of Percent Area Percent No. of Percent Area Percent
HHs Share (acre) Share of HHs Share of (acre) Share of
of Total Total Total Total
Jindal
Refinery Landless 18 Nil Nil Nil 63 Nil Nil Nil
(13.04) (45.65)
Marginal 74 61.67 109.56 33.73 55 73.33 75.23 46.74
Farmers (53.62) (39.86)
Small Farmers 30 25 106.61 32.82 17 22.67 58.39 36.28
(21.74) (12.32)
Medium 15 12.5 93.66 28.83 2 2.67 12.32 7.66
Farmers (10.87) (1.45)
Large Farmers 1 0.83 15.00 4.62 1 1.33 15 9.32
(0.72) (0.72)
Households 120 100 324.83 100 75 100 160.94 100
with land (86.96) (54.35)
Total
Households 138 - - - 138 - - -
(100.00) (100.00)
Anrak Landless 16 Nil Nil Nil 138 Nil Nil Nil
Refinery (9.64) (83.13)
Marginal 139 92.67 138.81 77.33 25 82.29 17.68 63.14
Farmers (83.73) (15.06)
Small Farmers 11 7.33 40.7 22.67 3 10.71 10.32 36.86
(6.63) (1.81)
Medium
Farmers 0 0 0 0 0 0 0 0
Large Farmers 0 0 0 0 0 0 0 0
Households 150 100 181.27 100 28 100 28 100
with land (90.36) (16.87)
Total 166 - - - 166 - - -
Households (100.00) (100.00)

Table 4.7 Details of Compensation Package
Category of Assets Jindal Refinery Anrak Refinery

1 Acre of Land Rs 2,00,500 Rs 4,05,000
1 job 1 job
Share in the company Ration card, two milch animals
Recorded Homestead Land Money Resettlement colony
House Money Resettlement colony
Cattle Shed Money Land
Open Well Money Money
Trees Money Money
In Jindal Refinery Area, most of the households (90.24 percent) have received monetary
compensation for their recorded cultivated land. Those who have not received are either
still fighting against land acquisition or waiting for money. Nearly half of the households
(48.78 percent) were promised a job in the company. All of them are trained in a technical
institute in Orissa for six months, and are presently receiving a stipend of Rs. 2,200 per
month. They will get their job once the company starts working. This form of
compensation is criticized most of the time. According to Nathan (2009), in mines and
mineral-related industries, many jobs cannot be given to former agriculturists as they
are semi-educated and low-skilled. However, the likelihood of getting such a job is
termed as “a bargaining chip”, in order to get agreement from the displaced people
(World Bank 1996). “Land for Land” is another possibility for recreating the livelihoods
of agriculturists. However, most of the time agricultural land is not available for this
purpose (Nathan 2009).
As in Jindal area the people are not much educated, most of the work involved mechanics,
electricians or gardeners (Table 4.8). Some people (23.17 percent) did not want a job.
Instead, they have taken a financial grant of Rs. 3, 00,000 per family. Others (28.05
percent) have not received anything; most of them are waiting for a job. Households
with encroached government land have not received any compensation. According to
the compensation package of Jindal, ex-gratia will be provided on par with government
land for encroachment which is at least five years old, as certified by the revenue officials.
Only two households have the same, and thus received monetary compensation for
their encroached land. Compensation for the acquisition of homestead land is yet to be
given. In our sample households, none of them have lost house, cattle shed or open well.
Monetary compensation for trees is also yet to be given. The company has promised to
give a share in the company to each affected household. However, no one knows the
reality.
Table 4.8 Received Compensation (Jindal)

Category of No. of Monetary Compensation Job Cash Not
Assets HHs for Job Received
Received Not received
Recorded 82 74 9 40 19 23
Cultivated Land (90.24) (9.76) (48.78) (23.17) (28.05)
Recorded
Homestead Land 3 0 3 NA NA NA
Encroached
Government Land 8 2 6 NA NA NA
House 0 - - NA NA NA
Cattle Shed 0 - - NA NA NA
Open Well 0 - - NA NA NA
Trees 5 0 5 NA NA NA
Table 4.9 Received Compensation (Anrak)

Category of No. of Monetary Compensation Job Not
Assets HHs Received Not received Received
Recorded Cultivated Land 138 136 2 0 138
Recorded Homestead Land 48 1 47 NA NA
Encroached Government Land 0 - - - -
House 29 3 26 NA NA
Cattle Shed 81 68 13 NA NA
Open Well 24 21 3 NA NA
Trees 76 71 7 NA NA

In case of Anrak Refinery, almost all households except two have received monetary
compensation (Table 4.9). None of them have taken compensation for their homestead
land and house, except a few. Here, people are asking for a rehabilitation colony with all
infrastructures, which Anrak has agreed to give. Most of them have received monetary
compensation for their trees, cattle sheds and open wells. Anrak has also promised job,
a ration card and two milch animals, which is not yet fulfilled.
As the affected households in both the refinery areas have received monetary
compensation, it is interesting to study how the affected households spend their
compensation money (Table 4.10). In Jindal Refinery area, majority of the households
(46.48 percent) have deposited a part of the money in bank. The second highest preference
(45.07 percent) was for construction of house, while the third highest was debt clearance
(35.21 percent). They also spent the compensation money in unproductive expenses
such as household consumption (29.58 percent), marriage (19.72 percent), purchase of
vehicles (5.63 percent) and ornaments (2.82 percent). Very few spent on productive
expenses such as purchase of agricultural land (2.82 percent).
Table 4.10 Spending of Compensation details by the Affected Households

Sl. Type of Use Number of Households (percentage)
No Jindal Refinery Anrak Refinery
1 Purchase of Agricultural Land 2 (2.82) 18 (10.84)
2 Purchase of Homestead Land 0 (0.00) 0 (0.00)
3 Purchase of House 0 (0.00) 0 (0.00)
4 Land Development 1 (1.41) 9 (5.42)
5 Construction of House 32 (45.07) 31 (18.67)
6 Household Consumption 21(29.58) 39 (23.45)
7 Marriage 14 (19.72) 33 (19.88)
8 Purchase of Vehicles 4 (5.63) 3 (1.81)
9 Deposit in Bank 33 (46.48) 111 (66.87)
10 Health 3 (4.23) 9 (5.42)
11 Education 4 (2.41)
12 Debt Clearance 25 (35.21) 81 (48.80)
13 Purchase of Ornaments 2 (2.82) 0 (0.00)
14 Purchase of Livestock 0 (0.00) 1 (0.60)
15 Purchase of other durable Assets 0 (0.00) 0 (0.00)

Notes: This table will not add up to hundred because of multiple responses
In Anrak Refinery area also the majority (66.87 percent) deposited their compensation
money in banks. This is followed by debt clearance (48.80 percent) and household
consumption (23.45 percent). Here also marriage and construction of house have an
important percentage. Unlike in Jindal, some households here have purchased agricultural
land (10.84 percent). Very few spent on education, purchase of livestock and other
durable assets.
In all these villages, the people have a mixed perception towards the compensation
policy. Villagers in the Jindal Refinery area are comparatively more satisfied than those
in Anrak Refinery area. In Jindal Refinery area, people supporting the cash compensation
are those whose agricultural land is in the rain fed area. Those with irrigation facilities
are opposing the same. Opposition from tribals is more than from non-tribals. Some
non-tribal villagers expressed that they are happy with the compensation money and
have started petty business with the same. However, the villagers have not received full
compensation because of middle men intervention. Getting a job in the company has
made people more satisfied.
The situation in Anrak Refinery area is different. In all the three villages, the villagers are
not happy with the compensation because though they have received compensation
money, employment was not provided to each household as promised. The people
complained that now they neither have agricultural land nor wage labour work. Although
Anrak construction work has started, they are hiring outsiders to do the manual work.
The villagers are surviving with livestock and the compensation money. What lies ahead
is a bleak future?
4.5 Conclusion
There are three possible strategies with different outcomes that have been followed by
mining companies in cooperation with governments (Downing, 2002). The first is to
displace the population without concern for the people. The second strategy is to
compensate or rehabilitate the people to a new location. The third strategy is to ensure
that livelihoods and social systems are restored and that the affected people are better off
in the post-project period (Downing, 2002). Although difficult, the third strategy will
lead to sustainable mineral development.
Land is an asset that provides food and livelihood to the people. It enables them to
utilize the major and sometimes the only skill that they possess – working on the land.
It can be passed on to the next generation and hence provides security to several generations
and lastly, it is marketable and in times of distress, serves as collateral. The only economic
opportunity the landless have in rural India is to work on other people’s land.
Displacement results in more wage conflict and the process is filled with uncertainty
and greater vulnerability. They do not know where to invest the capital so that it produces
an income stream for them that was at least comparable to what they got earlier. Cash
compensation is seen to lead to unproductive expenditure and tragically to feminization
of poverty. Hence, cash compensation is a complete lack of understanding of the livelihood
relations that people have with their land (Venkateswaran 2007).
Land for land is a possibility. However, it adversely affects the “social capital” that existed
between people in the same village. Invest in re-skilling the people so that they can be
employed is an option. Another option is not to sell the land but to lease it to the
company and to draw a regular income from the lease rent. Giving displaced people a
share in the profits of the company is another option. Though these options are not
perfect, a combination of them may provide some answers to this question (Venkateswaran
2007).
Workers of NALCO protested against the privatization plan of the Government of

India. As the outsees who got jobs are the lowest rank holders in the company, they
would be the first victims of privatization. In the beginning of the 1980s, when public
sector mining companies went for mechanization and modernization, the tribals who
had left their land to allow for mining activities were the first to lose their jobs. They
became completely impoverished (Sarangi 2004).
Sustainable development is ensuring a better quality of life for the present and future
generations. Therefore, policies must be developed to promote the social dimension of
development and not just the economic and environmental dimensions. A cost-benefit
analysis of all mining projects should be carried out, taking into consideration all the
social costs of mining, which the near-by communities are bearing in the form of
externality. The State Government should follow the Samata Judgement. All the
stakeholders including the community should participate in the discussion. The
government should also protect the tribals and their rights. A proper rehabilitation policy
for the mining sector is the need of the hour.
CHAPTER - 5
SUMMARY AND CONCLUSION
5.1 Introduction
According to the Geological Survey of India, bauxite deposits of Andhra Pradesh (AP)
and Orissa, referred as the East Coast Bauxite deposits are the largest bauxite reserves in
the country, with Orissa accounting for 51 percent and AP 21 percent of the total
reserves of India. The bauxite deposits of AP sector are broadly divided into Araku,
Chintapalli and Gurtedu groups. Though bauxite mining started in Orissa long back
(25 years), it is yet to start in AP. According to Oskarsson (2009), the causes of this
obstacle in AP are control of technology by a few multinational companies, lack of
financial resources, violent Maoist movement gaining strength in the bauxite hills, and
the awakening of the civil society to the negative consequences of bauxite mining.
However, the present Congress Government again promoted this project.
The Government of Andhra Pradesh signed two MoUs, one with Jindal South West
Holding Limited (JSWHL) of the Jindal Group and the other with the Government of
Ras Al Khaimah (GoRAK) to set up an Alumina and Aluminum Refinery and Smelter
in the state of AP, at locations other than the Scheduled Areas. The proposed refinery of
Jindal is in the plain area of S. Kota Mandal of Vizianagaram District and the proposed
alumina complex of GoRAK is in the plain area of Makavarapalem Mandal of
Visakhapatnam District. Both the cases are identical in their plan to mine bauxite from
the Agency Area of Visakhapatnam District via government-owned Andhra Pradesh
Mineral Development Corporation (APMDC).
In the mean-time, lots of agitation was going on in these coastal districts of AP to stop
mining. Samata and AP Girijan Sangham demanded the project to be stalled; they
organized awareness programmes to create awareness about the harmful effects of bauxite
mining, and protest rallies and dharnas to stall the project. Both the companies have
submitted their Environmental Impact Assessment (EIA) Report to the Ministry of
Environment and Forest with the help of a consultant agency. A detailed analysis of the
EIA report shows that, they have neglected the socio-economic part. Neither is there
any clear analysis about the existing socio-economic conditions of the people, nor on
the future impact of mining on their livelihoods. Therefore, the Research Unit for
Livelihoods and Natural Resources (RULNR) of the Centre for Economic and Social
Studies (CESS), Hyderabad, tried to fill this gap. To conduct this study, Samata, a social
justice organization in Visakhapatnam, was identified as partner. Samata works for the
rights of the tribal people of AP and for the protection of the natural resources and
ecology of the Eastern Ghats.
The study has the following main objectives:
and refinery areas.
(ii) To assess how mining will influence the livelihoods of the communities and
what exactly will be the benefits and costs from the mining projects.
(iii) To understand the Resettlement and Rehabilitation (R and R) packages and to

study the communities’ perception of the same.
Both primary and secondary sources of information were collected for the study.
The study areas are situated in the Visakhapatnam and Vizianagaram districts of AP.
First, the study area is divided into four zones, consisting of four mandals. They are:
S. Kota Mandal of Vizianagaram District (proposed Jindal Refinery), Anantagiri and
Araku Valley Mandals of Visakhapatnam District (proposed Jindal Mining),
Makavarapalem Mandal of Visakhapatnam District (proposed Anrak Alumina Complex)
and G. K. Veedhi Mandal of Visakhapatnam District (proposed Anrak Mining). These
zones are the strata of the study. A list of 15 villages, within three kilometers from the
proposed mines and refinery areas, and where land acquisition has either finished or
started, was prepared from these zones. However, the presence of Naxals prevented data
collection in Anrak Mining area. Therefore, the final study is based on 12 villages from
the first three mandals. Finally, 138 households from Jindal Refinery area, 51 households
from Jindal Mining area and 166 households from Anrak Refinery area were selected.
Analysis was done with the help of Sustainable Rural Livelihoods Framework.
5.2 The Findings

5.2.1 Existing Livelihoods of Affected Communities
According to the Sustainable Rural Livelihoods framework, people require a range of
assets to achieve positive livelihood outcomes. They are: Human Capital, Natural Capital,
Financial Capital, Physical Capital and Social Capital. These capitals are in the form of
different livelihood assets that the households can use to make a living. Being rich in one
form of capital while having inadequate access to others will be unlikely to lead to
sustainable livelihood outcomes.
In the study villages, there is a marked difference between the refinery villages and the
mining villages. The mining area is full of tribal villages in the hilly forest, while both
the refinery areas share the same characteristics in terms of all the capitals. Villages in
Jindal Refinery areas are tribal dominated, though not a part of Scheduled Areas.
Anrak Refinery area is dominated by Backward Castes. In all the three study areas, the
households have a diversified source of income. Their major occupations are agriculture,
farm and non-farm labour, job, NTFP collection, petty business, livestock rearing and
other occupations such as driving, washing, taddy tapping, cooking etc. In all the
villages, women have an equal share of participation in all the economic activities
except jobs. This is because of the high illiteracy rate prevailing among women. Health
problem is very high in the Jindal Mining area and Anrak Refinery area. Therefore,
these households are not very rich in human capital.
Coming to social capital, these villages are members of different institutions such as
PDS, DWCRA and Old-age Pensions, and they trust people in matter of lending and
borrowing. There is a strong social bonding among the villagers. They are also rich in
natural capital; most of the villagers have agricultural land, though the percentage of
marginal farmers is more in the refinery areas. Jindal Mining area is also rich with
NTFP. They have safe sources of drinking water, available in plenty. However, the
households are not very rich in physical capital. All of them (except a few) have a house
and other assets such as TV, fan, cycle and watch. The percentage of motorcycles and
refrigerator is very less. Many also have agricultural assets, especially every household
in Jindal Mining area.
The households are not very rich in financial capital. Nearly 70 percent of their monthly
expenditure is on food, yet they do not have food security for a year. Only in Jindal
Mining area, most of the households have food security. Most of them do not have
ownership of livestock and as their income is not sufficient, they have to borrow.
Sources of borrowing are SHGs and banks and primarily private lenders in Jindal
Mining area, though percentage of borrowing is not much here. They borrow for
agricultural use, social functions such as marriage, and to meet other household
expenditures.
5.2.2 Displacement Scenario

Land acquisition has begun in both the refinery areas; it has not yet started in the
mining area. In Jindal Refinery area, the process is completed. Many households have
lost their agricultural land. Acquisitions of houses, homestead lands, cattle sheds, open
wells and trees are very less here. Majority of the households are properly compensated.
For each acre of land they received Rs. 2, 00,500 as compensation money. Each patta
holder has been promised a job by the company once it starts operation. All of them are
trained in an institute of technology in Orissa for six months, and now they are receiving
a monthly stipend of Rs.2200. As the villagers are not educated enough, most of the job
are those of electricians and mechanics. Those household, who have not preferred job,
received a cash compensation of Rs. 3, 00,000. Jindal has also promised share in the
company.
In Anrak Refinery area, land acquisition process has completed. However, they are yet
to receive full compensation. All of them have received cash compensation of
Rs. 4,05,000 per acre for their agricultural land. Unlike in Jindal Refinery area, the
percentage of households losing their homestead lands, houses, cattle sheds, trees and
open wells is very high here. The villagers have received compensation money for cattle-
sheds, trees and open wells. They are also asking Anrak to provide a resettlement colony,
to which the company has agreed. Anrak has also promised to give a job, a ration card
and two milch animals to each family. However, this process has not yet started and the
people are looking forward to that compensation.
All the households have spent their compensation money in unproductive expenditure.
The major heads are debt clearance, house construction, social function and household
expenditure. Though saving money in banks has also a major percentage, it might not
last for more than a year or two. Hence, the question is how will they sustain their
livelihoods? The percentage of people who got jobs in the company is very less.
What about the landless? Where will the women workers go for work as they do not
have agricultural land now? Like all other compensation policies of India, this is also
gender biased.
5.3 Policy Options

Worldwide research on development induced forced displacement and resettlement is
increasingly focusing on revealing the impoverishment risks to which displaced
populations are exposed and on the need for targeted counter risk and reconstruction
strategies (Cernea 1997; Downing 2002). Compensation is still the main financial
instrument used for restoring the livelihoods of affected communities. However, it is
seen to be financially insufficient, and poorly conceived and implemented (Cernea 2007).
For extractive industries like mining, Cernea (2007) has proposed: (a) using the windfall
economic rent generated by the exploitation of natural resources; as well as (b) using a
fraction of those projects’ normal benefits and channeling them to reconstructing resettlers
livelihoods at higher than pre-displacement levels.
Van Wicklin (1999) has opened the avenue of “benefit-sharing” and argues that this
approach is legitimate on economic, financial, moral and political grounds. A share of
project benefits can start flowing into the resettlement areas during the reconstruction
period and continue thereafter. Cernea (2007) argues that financing of improved
resettlement is not only a financial matter. It also depends on political will and political
decision making by the project owners. He has given the following examples of good
national practices for benefit-sharing:
Colombia allocates a certain percentage of benefits from hydroelectric plants to the

development of rehabilitated area. In Brazil, there is a principle of reinvesting a percentage
of royalties from hydropower to the resettlement area. Canada adopted a strategy of
partnering with the local communities for equity sharing. In China, there are important
agencies, which have the responsibility of managing the reservoir development funds
and initiating development interventions to benefit the resettlers. The Canadian
Government made an agreement with the local indigenous communities as direct investors
in hydro projects, by contributing their lands. This enables them to receive a share of
project benefits as long-term partners, proportion to their land share in the construction
of the project. Norway adopted the Power Taxation Act to ensure new and higher tax
payments from power companies, which could then be redistributed.
Japan started a land-leasing experiment and twin financial transfers were made: (i) one
payment to the landowners leasing the land, which will enable those farmers to develop
alternative livelihoods for themselves, and invest the money received into nonland-based
income generating activities. (ii) regular rent payments for the leased land, to be
continuously paid to the local small-holders for the life of the project. Another innovative
strategy which Japan has pursued is to convert dry land into paddy fields, introducing
irrigation at government’s cost. Each resettler received an area approximately twice as
large as what was previously owned.
Sharma and Singh (2009) stated the R and R policy of Madhya Pradesh (MP) as a
progressive package. Not only the government, but the newly-emerging super thermal
power projects by the private sector in MP have also drawn up reasonably good R and R
packages. The Mahan Super Thermal Power Project being set up by Essar Global has
offered current market rates for the acquired lands, spacious plots for every adult in each
affected family, and “unemployment allowance” to all the displaced persons. This
allowance of Rs. 4,000 a month is to be paid till the project succeeds in offering a regular
job to the displaced persons or until he/she attains the age of 58 years, whichever is
earlier.
Reddy (2006) praised the resettlement policies of Nizamsagar Project and Tungabhadra
Dam Project in Andhra Pradesh. In the former, all displaced people were shifted to
neatly built resettlement colonies and were given land for land compensation. They
were also given cash grants to purchase agricultural implements. In the latter, all farmers,
including tenants were provided land in the command area. Every family was given a
constructed house. However, over the years the rehabilitation policy of AP was diluted –
Nagarjuna-sagar Project and Srisailam project are such examples. Mishra (2005) study
on the Rengali Dam in Orissa shows that due to its homogeneous nature, the rehabilitation
policy treats all displaced households equally. It included the landless and also the asset-
less, who generally derived their livelihood by their labour, as eligible for allotment of
land. Due to this policy, the size of landholding of the people increased after displacement.
Therefore, there is a need for creative approaches for identifying and using existing
potential to effectively and productively resettle both farmers and the landless. To make
this true a strong political will have to be exercised. Those who are forcibly displaced to
make way for development projects should be regarded as the first entitled to access the
benefits, and they should not be left undeveloped.
5.4 Conclusion
This study shows that all project-affected people do not have a sustainable livelihood.
Though they are rich in some capital, they are lagging behind in other forms of capital.
However, they are trying best to make a living out of their agricultural land, forest and
labour. Once mining or a refinery starts, they will be deprived from all these assets.
The compensation money paid is not enough for a sustainable living, and as the analysis
shows none of them spent the money on alternate livelihoods. Jindal has tried to give a
job to the patta holder and a share in the company. However, only time will tell how this
will work. Again, this compensation policy is not covering the landless and the women.
Therefore, Jindal should have tried for some initiative, with the help of the State
Government to help the people trying for alternate livelihoods.
The compensation process for Anrak has not yet finished. However, their compensation
package shows that, they are also giving importance to cash compensation. Like in Jindal
area, here also compensation money is going to unproductive expenditure. However,
unlike Jindal, Anrak has not promised any share in the company and is yet to train the
people, to whom they have promised job. The Government of AP does not seem to be
too keen on this aspect. Mining and Refinery will also have a negative impact on
environment and health. Hence, the companies should try and use improved technology,
which results in less pollution.
Roger Moody, the Editor of Mines and Communities, asked, “Is there a real demand for
alumina in India to necessitate bauxite mining in the Visakha Agency Area?” According
to him, 600 tons of aluminum in India can be recycled. India should follow the example
of Germany, which made recycling of aluminum compulsory. Mining will only benefit
the companies, while the poor people will suffer all the related socio-economic and
environmental outcomes. All the political parties in opposition are taking bauxite mining
in Visakhapatnam as an important issue. But what is the sincerity of the opposition
parties? The same parties forget the issue once they win the elections and might even go
ahead with mining. The tribal and civil society organizations are trying their best to
resist the mining, but only time will decide the fate of the tribals in Agency Area of
Visakhapatnam.
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CESS MONOGRAPH 10

Bauxite Mining in Eastern Ghats:

Prajna Paramita Mishra

RESEARCH UNIT FOR LIVELIHOODS AND NATURAL RESOURCES

CENTRE FOR ECONOMIC AND SOCIAL STUDIES

CENTRE FOR ECONOMIC AND SOCIAL STUDIES MONOGRAPH SERIES

Number - 10 March, 2010

Series Editor : S. Galab

© 2010, Copyright Reserved

Dissemination of research findings to fellow researchers and policy thinkers is an important

Sl. No Page no.

3.3.2 Social Capital

LIST OF TABLES AND FIGURES

4.5 Landholding of Sample Households in the Refinery Area 48

1.1 Sustainable Livelihoods Framework 6

Prajna Paramita Mishra

AAL Anrak Alumina Limited

The introductory chapter provides a discussion on the background of the study,

A substantial amount of compensation money received by the affected households has

An economist specializing in environmental and natural resource economics, Prajna

A political scientist and public administration specialist, M.Gopinath Reddy is

Corporation (APMDC)2 . According to the MoU, APMDC/GoAP should not sell or

1.2 Statement of the Problem

1.3 Research Gap

1.5 Conceptual Framework

Figure 1.1 Sustainable Livelihood Framework

Source: DFID (1999)

1.6 The Methodology, Study Area and Sample Selection

1.7 Report Structure

2.1 Mining in Andhra Pradesh

Table 2.1 Mineral Reserves of Andhra Pradesh

Figure 2.1 District-wise Mineral Revenue in Andhra Pradesh (2006-07)

Source: Government of Andhra Pradesh (2008)

Table 2.2 District-wise Production of Minerals in Andhra Pradesh

Source: Government of Andhra Pradesh (2008)

Source: Government of Andhra Pradesh (2007)

2.2 Bauxite Mining in India

Figure 2.3 Bauxite Mines in India

Source: http://www.mapsofindia.com/maps/minerals/bauxite-mines-map.html, 21st Au-

2.3 Bauxite Mining in Andhra Pradesh

Table 2.3 Bauxite Deposits of Andhra Pradesh

Group Deposit Size Mine Area (Hectares)

2.4 Mining in Forest Areas of Andhra Pradesh

Figure 2.4 Mining in Forest Areas of Andhra Pradesh

Source: Centre for Science and Environment (2008)

As mentioned in the introduction chapter, bauxite mining and aluminum refineries

The main objectives of this section are:

Table 3.1 Key Features of Sample Villages

Table 3.1 Contd...

Table 3.1 Contd...

Source: Field Survey (2009)

Table 3.2 Demographic Features of Sample Villages

Source: Field Survey (2009)

3.2 Diversified Rural Livelihoods

Figure 3.1 Primary Occupation in Jindal Refinery Area

Source: Field Survey (2009)

Figure 3.2 Primary Occupation in Anrak Refinery Area

Source: Field Survey (2009)

Figure 3.3 Primary Occupation in Jindal Mining Area