Identifier
Created
Classification
Origin
09CHENGDU110
2009-06-24 03:42:00
UNCLASSIFIED
Consulate Chengdu
Cable title:  

SOUTHWEST CHINA: PEASANTS, TITANIUM, AND HALTED DAMS

Tags:  EMIN SENV SOCI ECON CH 
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RR RUEHAST RUEHDH RUEHGH RUEHHM RUEHLN RUEHMA RUEHPB RUEHPOD RUEHSL
RUEHTM RUEHTRO RUEHVC
DE RUEHCN #0110/01 1750342
ZNR UUUUU ZZH
R 240342Z JUN 09
FM AMCONSUL CHENGDU
TO RUEHC/SECSTATE WASHDC 3262
INFO RUEHZN/ENVIRONMENT SCIENCE AND TECHNOLOGY COLLECTIVE
RUEHBJ/USDAO BEIJING
RHEFDHP/DIA DHP-1 WASHINGTON DC
RUEHRC/DEPT OF AGRICULTURE WASHINGTON DC
RUEHC/DEPT OF INTERIOR WASHINGTON DC
RUEHCN/AMCONSUL CHENGDU 3936
RUEHOO/CHINA POSTS COLLECTIVE
UNCLAS SECTION 01 OF 04 CHENGDU 000110 

SIPDIS

E.O. 12958: N/A
TAGS: EMIN SENV SOCI ECON CH
SUBJECT: SOUTHWEST CHINA: PEASANTS, TITANIUM, AND HALTED DAMS

REF: BEIJING 00001637

CHENGDU 00000110 001.2 OF 004


UNCLAS SECTION 01 OF 04 CHENGDU 000110

SIPDIS

E.O. 12958: N/A
TAGS: EMIN SENV SOCI ECON CH
SUBJECT: SOUTHWEST CHINA: PEASANTS, TITANIUM, AND HALTED DAMS

REF: BEIJING 00001637

CHENGDU 00000110 001.2 OF 004



1. (SBU) Summary: Displaced peasants, a new dam that will be
second only to Three Gorges, China's largest titanium
deposits, a sudden dam-halting order from the PRC Environment
Ministry and the transformation of villages on Xichang's rural
periphery are all linked to the construction of a
vanadium-titanium production base just outside Xichang in
southern Sichuan Province. Hundreds of households in the rural
Jingjiu district, 10 kilometers southwest of downtown Xichang,
are being moved to concentrated settlements to make way for an
18 square kilometer industrial zone that will become one of
China's top suppliers of titanium and vanadium. Peasants are
also being displaced from near 14 hydroelectric dams being built
on the Jinshajiang, Yalongjiang, and Dadu Rivers to supply cheap
electric power to the Jingjiu Industrial Zone for
energy-intensive processing of nearby deposits of vanadium,
titanium, rare earth metals, bauxite and copper ores.
According to an April 2009 press report, some peasants displaced
by the Xiluodu dam, expected to be China's second biggest when
completed in 2015, have been denied compensation by local
authorities. On June 11th, China's Environment Ministry halted
temporarily construction of several big dams on the Jinshajiang
since the two companies building them had not obtained the
required environmental impact assessments. PRC environmental
groups have praised the decision, while criticizing construction
companies for ignoring the law, and calling for a review of dam
approval procedures. End summary.



Resettling Villagers Displaced by Vanadium-Titanium Project

-------------- --------------


2. (SBU) While during a recent visit to southern Sichuan,
Congenoff saw how a new industrial zone is likely to transform
villages in the rural district of Jingjiu, about 10 kilometers
away (an hour by road) from downtown Xichang. Entering one of
these villages, Congenoff saw a long line of about 60
medium-sized trucks waiting to offload coal powder for a large
cement plant. Beyond the village, dust clouds appeared from
what villagers said was a new steel plant under construction.
After walking along the main road past green paddy fields and

painted signs on walls "When you expand production, consider
hiring a peasant," Congenoff turned towards a large cleared area
beyond a field off the south side of the road where new streets
were under construction. An office marked the "Sichuan
Yuanfeng Construction Project Management Co., Panzhihua Steel
Xichang Vanadium-Titanium Resettlement Point Management Office"
stood in front of the busy construction site. Workers were
laying down new roads and preparations for building new housing
within a large cleared area were getting underway.




3. (U) Note: According to recent reports from local Xichang
media, the Panzhihua Steel Xichang Vanadium-Titanium
Comprehensive Utilization project began in March 2008 with the
leveling of land at four construction sites and new building
infrastructure such as roads, electric power, communications and
power plants for the zone, as well as housing for 340
households ( 1240 people) displaced by the project. The
households displaced will be resettled in two different
locations. On May 21 local leaders held a meeting on the
progress of the project, which judging from a press photo, was
attended by at least fifteen of the peasants who were being
moved.



Peasant-Construction Workers

--------------


4. (SBU) Congenoff struck up a conversation with five
construction workers who were sitting in the shade against a
wall with their dust masks slung around their necks. The
workers said they were local farmers who were working on
building new homes for local peasants, some of whom would move
down from their plots of land in the hills. One of the workers
said the project was being paid for by the government and they
come to work when agricultural duties slow down. When asked if
this resettlement point near the main road would make it
inconvenient for peasants whose land was some distance away, one
of the peasants said people in the area supported the project
since mechanization had made it very hard to earn a living as a
farmer. They said the government is paying for the housing.
One worker said that in the old days you couldn't say what you

CHENGDU 00000110 002.3 OF 004


think; "it is much better now." He also said that peasants
living in the hills will also be settled at this central
location.




5. (SBU) An older man on a bicycle came over to join in the
conversation. He pointed to clouds of dust in the distance and
said it came from a work site where a steel plant is under
construction and complained about the dust that is everywhere
since construction began. Note: a June 19, 2009 BBS posting
complained about the dust coming out of the Jingjiu Industrial
zone -- online at URL tinyurl.com/jingjiu-dust




6. (SBU) Congenoff talked with some other workers, including a
recent civil engineering graduate of Sichuan University, about
the project. According to the workers, the housing construction
is part of the Chinese government's overall "Three Concentrates"
(sange jizhong) urban-rural integration project aimed at moving
peasants to create urban villages. This will concentrate local
rural population so that people can get better services. This
particular housing construction project began about a month ago.
The engineer said that sites had been laid out for over 30
three-to-four story apartment buildings that will be built with
"traditional ethnic characteristics." Note: Xichang is the
capital of the Liangshan Yi Minority Prefecture. This, one of
four projected resettlement sites, will be completed before the
next Spring Festival in February 2010. The workers said that
Liangshan is rich in rare earth metals and will become an
important supplier of vanadium and titanium to all of China.




7. (SBU) Comment: Both the rural-urban integration policy
resettlement under the "Three Concentrates" and the resettlement
of peasants displaced by the Jingjiu Industrial Zone appear to
be going on simultaneously. While the "Three Concentrates" is
meant to apply to all rural areas, in practice, resettlement of
peasants in Sichuan Province is often done on the margins of big
cities where it is much easier to provide employment to peasants
once they are resettled in a concentrated urban settlement
pattern. End comment).



Website Outlines Titanium-Vanadium Jingjiu Industrial Zone Plans

-------------- --------------


8. (U) According to the Liangshan Prefectural government
official website, the 18.5 square kilometer, located near the
Chengdu to Kunming railway line, is the only prefectural level
industrial zone in Liangshan. Abundant exploitable hydropower
resources in the Lianshan Prefecture - over half of Sichuan's
and 12 percent of China's - as well as abundant mineral
resources make this an ideal area for energy-intensive mineral
processing. Supplying the industrial zone with power are 110
kilovolt and 220 kilovolt power lines, with an additional line
planned for later. A total of fourteen hydropower plants will
be built on three rivers (Jinshajiang, Yalongjiang, and Dadu)
that will double the power available to the industrial zone
from 4 million kilowatts to 8 million kilowatts and bring down
electric power costs. (Note: the Panzhihua Steel Group
Titanium Company is a large state- owned enterprise that is the
largest titanium producer in China and the second largest in the
world). Nearby vanadium and titanium resources account for 93%
of China's total and nearly half of the world supply.
Liangshan also contains China's largest deposits of heavy and
light rare earth minerals along with rich deposits of copper,
lead, zinc and aluminum. The Taihe Vanadium, Titanium and Iron
Mine (1.5 billion tons of ore) is only 19 kilometers from
Xichang.



Peasants Displaced by Dams That Will Power Jingjiu Industrial
Zone

-------------- --------------


9. (SBU) The local and national press has been reporting
recently on the resettling of peasants displaced by Jingjiu
Industrial Zone and the many large dams that will provide power
to the Jingjiu Industrial Area. To judge by these press reports
and Congenoff's limited conversations with people in Jingjiu,
resettlement of people displaced near the industrial zone

CHENGDU 00000110 003.2 OF 004


appears to be going relatively well. However, Guanghzou-based
national newspaper Southern Weekend (Nanfang Zhoumo) painted a
somewhat different picture in an April 2009 report on displaced
peasants from the village of Guazicun, in Deyang county about
120 kilometers northeast of Xichang on the Sichuan -Yunnan
provincial border. [Note: Southern Weekend, which has a
tradition of investigative journalism at the edge of the
permissible, sells several million copies across China every
week. ] According to Nanfang Zhoumo, due to a sudden drastic
breakdown of law and order in their village and the refusal of
the local authorities to do anything about it, the 53 households
of 220 peasants together with their village party secretary fled
one evening in 1996 en masse to another county without telling
the local authorities. The reporter does not say why order
broke down drastically, simply juxtaposing the break-down of
law and order, the flight of peasants, the construction of the
dam and the refusal of authority to recognize their right for
compensation for their collective rights to their land,
allowing readers to draw their own conclusions.




10. (SBU) Now these peasants, as described by Nanfang Zhoumo,
will lose twice over the industrial zone project: both the land
they must now rent in the Jingjiu district of Xichang and
compensation they are being denied for land in Guazicun which a
new 12.6 million kilowatt hydroelectric plant will flood. The
ten-year- long Xilouodu Dam construction project, when completed
in 2015, will be China's second largest after the Three Gorges
Dam. Local authorities told the peasants' village Party
Secretary that he had been expelled from the Party and the
villagers could not get PRC national ID cards or any
compensation since the village they belonged to no long exists.




Environment Ministry Ordered Jinshajiang Dam Construction Halt

-------------- --------------


11. (U) On June 11, subsequent to Congenoff's visit to the
area, the PRC Environment Ministry Office at its press
conference and on its website announced a halt to construction
of dams on the middle reaches of the Jinshajiang river by two
companies, the Yunnan Huadian Ludila Hydropower Ltd. and
Huaneng Longkaikou Hydropower Ltd. , that had started
construction without authorization and without obtaining an
environmental impact assessment. In some cases the flow of the
river has already been cut by dam construction. A group of
Chinese environmentalists wrote to the Environmental Ministry
praising the decision and pointed out that these projects have
already down a great deal of damage in construction, including
resettling of peasants which has already begun in some cases,
damaging vegetation, putting wastewater in streams and
threatening endangered species of fish. The mentioned
specifically the large Jiaba and Xiluodu dams under
construction.




12. (U) The environmentalists called for a review of dam
approval procedures and criticized the overdevelopment of
hydropower, the damage it causes and the arrogance of companies
that start a project, figuring that they'll "get on the bus
first and buy a ticket later". The letter was signed by
organizations such as the Friends of Nature and Green Rivers as
well as by some geologists, environmentalists and journalists.
The environmentalists' letter, together with nine color
photographs of Jinshajiang dams under construction in Yunnan and
Sichuan without having obtained environmental impact assessments
is available at URL tinyurl.com/jinshajiang-dam-stop.



Comments

--------------


13. (SBU) The Nanfang Zhoumo report does not make any direct
connection between the forcing out of the peasants and the
subsequent construction of the Xiloudu dam which will flood
their village. That is apparently left as an exercise for the
reader. In Sichuan Province, the situation of peasants and
their treatment by government officials appears to worsen the
deeper into the countryside you go. On the margins of the city
of Xichang, resettlement may be going relatively well, but the
April 2009 article raises familiar doubts about how peasants are

CHENGDU 00000110 004.2 OF 004


treated in impoverished areas where the quality of local
officials is usually quite low. Now that Jinshajiang as well
as Nujiang (reftel) hydropower dam construction projects are
both on hold after much money has already been spent on
construction, we shall see if the "get on the bus first, then
buy a ticket" permissions-ignoring schemes of the dam
construction companies will work out for them in the end.



Appendix:

Press Reports and Photo Links Collated by Consulate

-------------- --------------

-- Report on May 21 meeting on progress of resettlement of
peasants displaced by construction of the Jingjiu Industrial
Zone at URL tinyurl.com/xichang-anzhidian

-- Photos of a peasant resettlement point in early construction
phase at URL tinyurl.com/jingjiu

-- Complaints about blowing to Xichang from the Jingjiu
Industrial zone online at URL tinyurl.com/jingjiu-dust

-- Jingjiu Industrial Zone webpage URL at
tinyurl.com/jingjiu-industrial-zone

-- Xiluodu Hydropower Station: Location and Physical and Social
Environment - URL at tinyurl.com/xiluodu-hydroproject

-- Displaced peasants, their village flooded by the Xiluodu
Hydropower Station reported in April 2009 Southern Weekend - URL
at tinyurl.com/xichang-jinshajiang-peasants

-- PRC Ministry of Environment Protection Office Letter No.
(2009) 603 "Notice Ordering Halt of Construction on the Kaikou
Hydroelectric Plant on the Jinshajiang" at URL
tinyurl.com/sepa-huanengletter and press release of June 11
announcing that hydroelectric projects on the Jinshajiang would
be ordered stopped.

URL at tinyurl.com/sepa-jinshajiang-pressrel

-- PRC environmentalists letter praising June 11 PRC Environment
Ministry Decision to Halt Dam Construction on Middle Reaches of
the Jinshajiang posted on the Chinese language website of the
China Development Brief at URL tinyurl.com/jinshajiang-dam-stop

End Appendix.
BOUGHNER