Balco Aluminium Smelter Disrupted When Chinese Constructed Chimney Collapses

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Global Trade

From the human perspective it is a tragedy, at least 31 people were crushed to death when a 275 meter power station chimney collapsed following a lightening strike in Korba, India. The 1,200 MW power station is being built as part of an expansion of Balco’s (Bharat Aluminium Company) aluminum smelter from 350,000 tons/annum to 650,000 tons and eventually to 1 million tons. Balco boasts this will make it the largest producer of aluminum from one location ” a claim that may not last long if EMAL’s 1.4 million ton plant comes on stream at the end of 2010 as planned. The reason the tragedy at Korba is hitting the headlines is not so much the human death toll as the fact the chimney was being built by a local firm called GDCL under contract to a Chinese company Sepco. Many of the workers on the project are said to be Chinese although reports suggest none of those killed were anything but local Indians. The Chinese workers high tailed it out of town after one of their number was reportedly lynched by angry locals who held the Chinese contractors responsible. Sterlite the owners of Balco said ‘excessive rains and lightning’ may be a possible cause for the accident ” although shoddy workmanship is suspected as being the real reason.

It has been a feature of a growing trend for Chinese civil engineering firms winning projects overseas, more often in Africa than elsewhere, to bring their own labor with them. No doubt they would claim this is to reduce communication and skills issues but locals suspect it is more to do with costs. Australians reacted angrily to a local politician, Colin Barnett’s, call for a relaxation of Chinese worker restrictions following interest from Chinese companies to invest in his province. The Chinese are interested to build a steel mill among other investments but using their own labor appears to be a requirement that does not sit comfortably with the government in Canberra. In today’s economically challenging times, jobs for the locals are being given more focus than they were in boom times.

The missing Chinese workers on the Balco smelter project have not been found yet but are likely to be located soon following a block on air and sea ports to prevent them from leaving the country. Using foreign contractors may have looked like a good deal financially at the outset but will cost Balco dear as its turns out.

–Stuart Burns

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