Maputo - Indian firm Jindal has become the latest company in Mozambique to become embroiled in a mining resettlement scandal, which threatens to trip up the booming coal sector.
On August 14, amid much fanfare, Mozambique's President Armando Guebuza inaugurated Jindal's massive new coal mine in northwestern Tete province that hugs the mighty Zambezi River.
It was the third biggest mine of its kind in the country, which has already seen seven percent-annual growth fuelled by revenues from one of the world's largest unexploited coal fields.
Two decades after of a crippling civil war, it is just the kind of investment Mozambique welcomes and that - if well managed - may help pull it out of poverty.
Jindal, which is also a steel maker, eyes exporting ten million tonnes of coal annually, cashing in on industrial development in India and China.
But just days before the inauguration of the mine, anger at the company's failure to relocate 2,500 nearby residents boiled over into conflict.
Irate locals - most of whom survive from subsistence farming - attacked four Jindal employees according to local environmental group Justica Ambiental (JA).
“It is the sowing period and one of the things (Jindal) promised is that they would give them lands to grow,” JA spokesman Ruben Mann said.
“They didn't, so the population saw their food safety threatened and knew that yet again they were not going to have a harvest.”
Jindal Mozambique head Manoj Gupta told AFP the government only approved the resettlement plan recently, which had delayed the process and blamed the trouble on “outsiders” who create problems.
“There was an issue with the community, because some of the people were drunk,” he said without elaborating.
The firm expects to resettle 434 families within the next two years.
It is not the first foreign firm to stumble into a resettlement controversy.
Brazil's Vale and Anglo-Australian Rio Tinto, who like Jindal use open-pit mining, have had their problems too.
Vale moved 1,300 families to make way for its mine in Moatize in Tete province.
But the community complained they were settled too far away and that their new houses were crumbling.
Protesters blocked the mine and railway in April demanding more compensation and slowed exports.
After the 16-year civil war ended in 1992 Mozambique passed a law giving communities considerable power over their territory.
Land is owned communally and firms have to make several commitments before they are granted usage concessions.
But activists say the communities get the short end of the stick.
Human Rights Watch has attacked both Vale and Rio Tinto for shoddy resettlements.
“Many of the 1,429 households resettled to make way for Vale and Rio Tinto's international coal mining operations... have faced serious disruptions in their access to food, water, and work,” the rights group said in May.
The group says that is devastating in a country where four out of five people survive through subsistence farming.
Citing government data, Human Rights Watch said 60 percent of Tete's total surface is taken up by mining concession and exploration licences as well as applications pending approval.
“The high concentration of land designated for mining licences in Tete province has profoundly limited the availability of appropriate resettlement sites for communities displaced by mining operations.”
Jindal has had to hack out part of land it had set aside for mining because the government did not have any free to give to landless communities.
“To give the land for resettlement is the responsibility of the government but the government does not have the land. So we have taken out the land from our concession area,” said Gupta. - Sapa-AFP