Environmental concern? Global NGO leads campaign urging banks to cut ties with Odisha steel project

By Rajiv Shah

A decade after the withdrawal of the South Korean multinational POSCO from Odisha following large-scale protests, questions remain about whether India-based JSW Steel, which took over the project, can successfully revive the 13.2 million tonnes per annum (MTPA) steel plant and coal-fired power plant. POSCO initiated the project in 2005 but exited in 2017 due to sustained local opposition.

The issue has resurfaced amid a renewed grassroots campaign, supported by the global NGO BankTrack, which argues that the 2,677.80 acres of forest land acquired for the project should be returned to local communities rather than retained by the state government. The Anti-Jindal & Anti-POSCO Movement (JPPSS) has filed a complaint with Australian bank ANZ and Japanese banks Sumitomo Mitsui Banking Corporation (SMBC), Mizuho, and Mitsubishi UFJ Financial Group (MUFG), urging them to withdraw financing from the Rs 65,000 crore (USD 7.8 billion) JSW Utkal Steel project, which includes a 900 MW captive coal power plant.

The complaint, filed with BankTrack’s support, alleges human rights violations linked to JSW Steel and calls on the banks to cease further financial involvement until an independent investigation and remedial process is completed. It highlights that between 2019 and 2024, these banks issued multiple loans to JSW Steel, during which time the company allegedly acquired land without the consent of indigenous residents, undermined livelihoods, and collaborated with the state to suppress opposition.

According to the complaint, peaceful protestors faced excessive police force, arbitrary arrests, ill-treatment in custody, and restricted movement. The project site, located in a region already classified as severely polluted with a Comprehensive Environmental Pollution Index (CEPI) score of 69.26, risks exacerbating environmental degradation and public health concerns if developed. A 2022 briefing by the Centre for Research on Energy and Clean Air warns that the proposed steel plant would significantly exceed WHO air pollution limits, impacting local health.

JSW Steel, headquartered in Mumbai, is India’s second-largest steel producer and the twelfth-largest globally. A subsidiary of the USD 24 billion JSW Group, it operates 13 steel plants—11 in India, one in the U.S., and one in Italy—along with 12 iron ore and three metallurgical coal mines. JSW Steel supplies major automotive firms including Fiat, Piaggio, and Ford. According to Global Energy Monitor, 66% of its crude steelmaking capacity is coal-based.

The NGO claims JSW Steel emits 2.36 tonnes of CO2 per tonne of steel—higher than the global average of 1.95 and India’s average of 2.0. Although JSW has a Climate Action Plan, it only targets emission intensity for 2030 and 2050, not absolute emissions.

The plan also overlooks coal mine methane, which could increase the company’s climate impact by 27%. BankTrack argues that for the steel industry to meet the Paris Agreement’s 1.5°C target, no new blast furnaces lacking 90% effective carbon capture, utilization, and storage (CCUS) should be commissioned after 2025. Despite this, JSW Steel plans to commission seven new coal-fired blast furnaces by 2036. With a 20-year operational life, these furnaces would likely operate into the 2050s. The company also plans to build a captive coal-fired power plant for the Utkal project.

In securing coal supplies, JSW Steel is actively acquiring or developing metallurgical coal mines in India, Mozambique, and Australia. It appears on Urgewald’s metallurgical coal exit list for its plans to develop two coal mines in India: Sitanala and Parbatpur Central.

BankTrack reports that constructing the Utkal project involves clear-cutting hundreds of acres of forest, with photographic evidence suggesting this has already begun without environmental clearance. The project also includes a port requiring the destruction of mangrove forests and sand dunes—critical ecosystems for local biodiversity and livelihoods.

The NGO further warns that the plant would extract large volumes of water from the Mahanadi river for industrial cooling, while discharging pollutants that threaten the river’s quality. As the Mahanadi is a key drinking water source, this poses a direct risk to water security for nearby villages.

Since 2022, several human rights defenders—including Narendra Mohanty, Debendra Swain, Muralidhar Sahoo, and others—have been arrested in connection with peaceful opposition to the project, which BankTrack describes as a criminalisation of dissent. Protests continue, with residents of Dhinkia village marking the third anniversary of a police crackdown by observing a Black Day earlier this year.

Earlier, on February 20 also, BankTrack sent letters to 22 banks that had recently financed JSW Steel—including BNP Paribas, Mashreq Bank, and Standard Chartered—urging them to publicly rule out support for the Odisha project. While 12 banks responded, none committed to withdrawing support.

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