By Shambud Joshi
As a retired employee of a cement company in East Jaintia Hills, I feel provoked to write this article seeing the recent controversy over public hearing at Lumshnong and Brichyrnot. I am married to a local and my children are grown up and identify themselves as Khasi-Jaintia Scheduled Tribe. They are educated and encouraged by me to become disturbed and angry about the news reports concerning the public hearing at the above mentioned places. They feel that the real story has to be told and actually this is my story written by one of my children. I hope that my story will help the people of Meghalaya, especially the next generation belonging also to my children and their children to realize the rich wealth of Meghalaya and how we remain ignorant of this important factor in our lives. It is a beautiful state and we are happy that tourists have now started to come. But at the same time we are sorry at how some people of this state have sold their wealth and the future of their children so cheaply.
The story of limestone exploitation at EJH started long ago ever since the Directorate of Mineral Resources, Government of Meghalaya identified the existence of 652 million tonnes of chemical and cement grade limestone deposits extending over an area of 76.8 sq.km. in the Lumshnong area. Star Cements was the first to obtain Single Window clearance for setting up their plant in 2004. Soon the operations of Star Cements started and the attractive incentives by the Industries Policy of the state attracted the attention of others and probably in 2006, seven other companies forwarded their applications for Single Window clearance to the then CM who happened to be Mr JD Rymbai. Mr Rymbai must have studied the file and found that the applications were not upto the mark and not in the interest of the state and its people and refused to comply with their request. It is a well kept secret and perhaps it is being told for the first time that the then President of the Congress Party, Madam Sonia Gandhi then called JD Rymbai to Delhi and there ordered him to quit his chair and hand over the reins to Mr DD Lapang. This was before the state election in UP and the Congress Party needed money. Lapang became CM and NOCs for 7 new cement companies within a restricted area of 25 km were issued. That was the first phase of the sell-out.
This write-up is based on the lack of political, scientific, economic and cultural opposition over the proposed extension of mining operations by Star Cements. No one has raised the question over the benefits to the local community from such mining. From social media videos one can see the overall community support for the proposed extension in the mining area and over the jobs that it can locally provide. The only opposition in the public hearing was from NGOs such as KSU and HITO and it is generally over environment issues which the Meghalaya State Pollution Control Board and Forest Department can easily brush aside, even if the new mining proposals are in principle totally against the establishment and spirit of the Narpuh Wildlife Sanctuary. Narpuh Sanctuary is a cultural icon of the Jaintia people yet no one cared to mention this. Also the credibility of NGOs to raise objections is questionable as everyone knows that they will oppose any form of development from which they cannot make money. From the political side there is complete silence but this is not surprising. A 500 rupee note has the surprising ability of shutting off the voice of our politicians and it seems now even the voice and conscience of Church leaders. Below however I will try to give how the public hearings are also another sell out of our interests.
Sell out from the economic perspective
Below are some of the less known economic facts about the cement industry in Meghalaya. This essay is an effort to make a break up of the profit and loss picture from manufacturing cement in Meghalaya.
Landed cost of cement grade limestone when the company also is owner of the mines – Purchase price of limestone from 3rd party suppliers and current open market price is Rs. 850/ MT. The cost would be cut by 75% if limestone is from captive mines owned by the cement company itself, thereby cutting the cost of cement production. Landed cost in this case could be as low as Rs.210/- per tonne.
(1) Manufacturing cost for one ton of cement from limestone mines owned by manufacturing company (approximate).
a. 2 tons of limestone roughly convert to one tonne clinker app 210 x 2 = 420.
b. Other raw materials Calcium Oxide, Silica, Aluminum etc app 300.
c. Fuel in the form of coal app 500.
d. Taxes, cess, royalty, labour etc app 900.
Total Manufacturing cost for one ton of cement app
Rs 2,120
(2) Cost of one bag of cement sold to the public @ Rs.450 per bag or Rs. 9000- per tonne.So App take home profit from one tonne of cement ( 9000 – 2120) is – app Rs.6880
(3) Declared production of cement by Star Cements per year As per information provided in the Net is 7.67 MTPA ( meaning per Year the company will produce 76,70,000 tonnes of cement) and its Estimated production per day (TDP) for 2024 will be 21,013 Metric Tonnes
(4) Estimated take home profit of Star cements
(a) For one day @ 21000 TPD @6880 profit per tonne Rs 14,44,80,000 ( app 14.50 crs per day )
(b) For one year (14.50 Crs x 365 days ) is App Rs.5292,96, 00,00,000 (App. 5292 Crs per yr)
This is huge by any means of measurement!
The point here is that Meghalaya in its desire to become known as an industrially developed state makes the most appealing, most attractive Industrial Policy. People are then invited to invest in the state which again through its Directorate of Mineral Resources makes no secret of the vast mineral wealth just waiting to be exploited. Some unknown industrial entity or fly by night operator from somewhere in India comes across this policy and decides to take advantage of it. He comes in and finds a paradise in heaven with greedy politicians eager to serve themselves and a public totally indifferent as to what kind of future they leave for their children. Ideal environment for a Sell Out!
Taking the Star Cement example one has to ask just how much Star Cement ploughs back to the owners of the limestone deposits from where the limestone for the cement is produced? Incidentally the real owners are the communities. So what do the communities that own the limestone get? Practically nothing as the CSR (Corporate Social Responsibility (CSR) is the funding that corporates plough back to the society) by Star Cement is not commensurate with the profits it makes. It’s so funny that if it was not so tragic to see the communities that are thus abused and cheated crying out, as in the public hearing, “give us more; give us more! We want more exploitation.”
In Lumshnong and Brichyrnot we must erect a monument that should read “For our today, we took away your tomorrow.” The Education Department of Meghalaya must seriously consider teaching our students how to identify a ‘Sell Out,’ where we stop making fools of ourselves in the future.