I'm guessing the paper and litter inside is burnt to create heat for the pan which would sit on the hole on top.

I don't think this is being a stove at all. I think it used to be a stove, and is now being used as something else.

Note the rails on the sides, which look just right to hold oven racks.

And if it were being used as a stove, it seems unlikely that there would be paper or plastic containers inside.

I don't have much of a clue as to what it is being used for now. I'd love to know what the top is or was.