The Mineral Bride: A Century-Long Tale of Resources, Rights and Regional Development

Prologue: A Marriage of Convenience Imagine a wedding where the bride gets poorer while the groom grows increasingly wealthy. This isn’t a fairy tale – it’s the story of Tata Steel’s century-long “romance” with the mineral-rich Indian state of Odisha. While Tata Steel proudly claims on its website that it “courted and married” Odisha, this relationship reveals a darker tale of resource exploitation and stunted development.

Act 1: The Courtship (Early 1900s) The story begins in 1907 when a geologist working for Jamset Tata discovered “exceedingly rich” iron ore deposits in Odisha’s Mayurbhanj region. Like a suitor who sees a wealthy heiress, Tata quickly secured mining rights on extremely favorable terms from the princely state. But this wasn’t meant to be a partnership of equals:

• While Odisha provided the minerals, the value-adding steel plant was built in Jamshedpur (Bihar)
•  Odisha got only low-paying manual labor jobs
• The state bore all the environmental and social costs of mining
• The real wealth creation happened elsewhere

Act 2: The Extraction (1911-1967) For over 50 years, trains laden with Odisha’s iron ore regularly left for Jamshedpur. The numbers tell a stark story:

•  Odisha received only 15% of the value addition from its minerals
• Only 9% of jobs created were in Odisha
• Meanwhile, Jamshedpur blossomed into an industrial hub hosting dozens of companies

Act 3: The Aftermath When the mines were depleted in 1967, Tata Steel simply moved on, leaving behind:

• Destroyed agricultural lands
• Polluted water and air
• Displaced tribal communities
• A barren wasteland where the mines once stood

Act 4: The Modern Era – Old Patterns Continue The story doesn’t end there. Tata Steel found new mining areas in Odisha’s Keonjhar district, where:

• Local farmers can’t sell their produce due to pollution
• Residents suffer from respiratory diseases
• Roads are damaged by heavy vehicles
• The region remains severely underdeveloped

The Double Standards The company’s contrasting approaches reveal much:

• When protests erupted against its car plant in West Bengal, Ratan Tata personally intervened
• When 13 tribals were killed protesting land acquisition in Odisha, the company remained largely silent
• Tata chose West Bengal for its high-value car manufacturing while continuing to use Odisha mainly for raw materials

The Larger Questions This story raises fundamental questions about:

1. Who really owns mineral resources in a federal system?
2. How should benefits from natural resources be shared?
3. What obligations do corporations have to regions they extract resources from?
4. How can mineral-rich states ensure development when the value addition happens elsewhere?

Epilogue: Time for Change? The paper concludes with a call to action:

•  Odisha needs to demand more value-addition within the state
• Mining leases should be tied to local development commitments
• The state’s politicians need to be more assertive about its rights
• The myth of “national resources” needs reexamination when some states bear all the costs while others reap the benefits

This story of Tata Steel and Odisha serves as a powerful case study of how corporate-state relationships in resource-rich regions can perpetuate underdevelopment even while creating wealth – just not for the people who need it most.

Academic Abstract:

Historically, Tata Steel has been exploiting exhaustible mineral resources of Orissa without contributing to the local value‐added activities. Other Indian states like Bihar/Jharkhand, West Bengal and Andhra Pradesh, in the name of national properties, silently encouraged Tata Steel to continue its exploitation so that they get advantage of high‐value added activities that the company tends to locate into their territory. Most unfortunately, politicians and bureaucrats of these states did not allow the development of vital infrastructure of Orissa like port and railway facilities for their narrow economic gain. Orissa continued to suffer from high social costs of mining like environmental degradation, waste land, air and water pollution, damage to agriculture, etc., due to increased mining activities by Tata Steel and other corporate entities in the post‐Independence period but got no benefit in terms of local value‐addition. It is high time that Orissa people, intellectuals, and politicians acted to safeguard the larger interests of the state. Companies like Tata Steel that have been exploiting Orissa without contributing to the local economy must be asked to leave the exhaustible mineral resources of the state.

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Full citation: Pradhan, Jaya Prakash (2007), ‘Tata Steel’s Romance with Orissa: Minerals-based Underdevelopment and Federal Politics in India’, ISID Working Paper, No. WP2007/03, 2007, New Delhi: Institute for Studies in Industrial Development.

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