Tata Steel will form a committee to undertake a social audit of its Kalinganagar project in Orissa, to address issues related to negative social impact of industrialisaion.

H M Nerurkar, managing director of Tata Steel said, "We will form a committee comprising eminent persons to undertake a social audit. I am willing to do this audit for the next five years. Financial impact of the project on the livelihood of the people and medical help will be monitored."

Nerurkar's announcement came in the context of media queries on allegations of human rights' exploitation in the project. Tata Steel conducts a voluntary social audit of its Jamshedpur operations every 10 years.

The company signed an MoU with the Orissa government under which for the Kalinganagar project in November 2004, but more than five years on, 300 families have not been moved from the site.

The land acquisition process for the project in 2006 sparked a violent agitation by tribals and the police firing that followed left 14 agitators dead.

Human rights activists have blamed industrial projects for displacement of tribals, and their cause that has eagerly taken up by Naxalities, literally on a war footing.

According to a recent Citigroup report, tribals stand most to lose given that they comprise 9 per cent of the population and their land makes up around 40 per cent of the land acquired till date.

Accepting that Naxalite movements enjoyed good local support, he said there was a dissatisfied lot that was involved in agitations against projects.

He added that Tata Steel would address the issue by working with the communities. He added that the group had been doing that for 100 years and would continue with the practice.

Tata Steel will also go ahead with its Rs 20,000-crore steel plant. Chhattisgarh project as per its memorandum of understanding with the state government in 2005.

The 5.5 million-tonne Chhattisgarh project was planned in the Lohandigunda block, 20km from Jagdalpur. The project requires 5,050 acres which the state government is in the process of acquiring. The company has already deposited the Rs75 crore needed towards compensation, with the majority of 1,505 land-owners having received payment.

Meanwhile, the emergence of quarterly contracts in place of the earlier annual contracts has led to a sharp increase in raw material prices in international markets and has forced the company to re-negotiate prices of coal and iron ore with some of the international suppliers.

''In the current fiscal, we'll need two million tonnes (mt) of imported coal for India operation and another eight mt for Tata Steel Europe and the entire quantity is to be obtained from the single source,'' Tata Steel managing director, Nerurkar, said today.

''An estimated 19-20 mt of iron ore, all imported, will be needed for Tata Steel Europe''.

Tata Steel's India operations at Jamshedpur (7 million tonnes) met 55 per cent of coal requirement by way of imports while it was self-sufficient in iron ore.

He added that Tata Steel Europe (17 mt) was entirely dependent on imports for both coal and iron ore.
He said that raw material prices had jumped 80-90 per cent with coking coal rising from $125 to $220 a tonne while iron ore prices increased from $65 to $110 a tonne.

Responding to a question as to whether the company would also re-negotiate prices with its customers such as automobile companies, construction and infrastructure firms, he said any advantage to be obtained on raw material prices would be passed on to customers.