India is optimistic on commercial coal mining but there are grounds to be tested
ON JUNE 18, Prime Minister Narendra Modi launched the e-auction of 41 coal blocks spread across five states for commercial mining with a combined peak capacity of 225 million tonnes per year.
The move seeks to turn the COVID-19 crisis into an opportunity under the Atmanirbhar Bharat Abhiyan.
In 1973, the Coal Mines Nationalisation Act restricted the coal mining operations to government bodies due to complaints of unscientific mining and poor working conditions in private mines.
The recent Mineral Laws (Amendment) Ordinance, 2020, opens mining to the private sector with no restriction on end-use of coal and permission for 100 percent foreign direct investment (FDI).
The companies will also not be required to pay the current fixed fee per tonne but share the revenue with the government through a new market-determined model.
The move is supposed to close the gap between government’s revenues and expenditure and help save foreign exchange through domestic extraction of upto 225 MT of coal by 2025-26. It, however, comes at a time when India’s energy mix is already shifting towards cleaner renewables.
The cost of producing power through cleaner routes has been falling and global players are shying away from the polluting fuel. Global mining giants like BHP Billiton, and Rio Tinto have already said they don’t want to invest in coal due to pollution concerns and lack of commercial viability. As of 2018, India had around 9.5 percent of world’s coal reserves and accounts for 7 percent of global carbon emissions.
Cost of producing power through cleaner routes has been falling and global players are shying away from the polluting fuel
Currently, India is the second largest producer of coal and has the fourth largest coal reserves but it is also the second largest importer, importing around 200 MT (million tonnes) valued at Rs 0.5 lakh crore annually.
Most of the import is of coking coal, a key raw material used in steel industry because the domestic availability of high-quality coking coal is limited.
The coal production of Coal India Limited (CIL) during 2019-20 was 602.15 MT, registering a 0.78 percent decline in growth. Higher taxes, levies and transportation costs have also made Indian coal less lucrative to domestic buyers, especially in coastal areas.
For instance, although Indian coal is cheaper than Indonesian coal at free on board (loading), but by the time it reaches coastal power plants located far from mines, it loses out in cost benefit to Indonesian coal which is transported via sea.
“It is not the appropriate time to auction the mines because there is no rise in demand for coal and hence these will not fetch the right price. There should be rationalisation in terms of what is the need of the hour,” says Ramamurthi Sreedhar, an Earth Scientist and mining expert at non-profit Environics Trust. “Natural resources are meant to be preserved for future generations while meeting our own needs. It is futile to extract more coal on the basis of zero rise in national demand.”
Objections from States
Jharkhand has about 27.3 percent coal reserves in India. Out of the nine blocks allotted for the auction in Jharkhand, six come under the Fifth Schedule areas. Fifth Schedule areas are ones which have a considerable portion of tribal population.
A Tribal Advisory Council (TAC) is set up in each state having a scheduled area whose function is to advise the Governor on matters relating to “welfare and advancement of Scheduled Tribes” in the state. Besides, the Governor is obligated to consult the TAC before making any regulations related to governance in the Scheduled Areas, including land alienation and land transfer in order to inform the decision-making process in a meaningful way.
“If these areas are mined, there would be widespread protests. Majority of these areas are covered in forest tracts, the source of livelihood for the tribals. A large forest area in Jharkhand has already been uprooted by coal mining in Jharkhand,” says Gopinath Ghosh, a human rights activist in Jharkhand campaigning against privatisation of coal mining.
Jharkhand state government has already filed a petition in the Supreme Court challenging the Centre’s move for coal privatisation. In the area of Hasdeo Anand, Chhattisgarh, sarpanches of 25 village panchayats have collectively signed a letter declaring that they do not want the auction to happen as it will impact huge forest land and their livelihood.
The forest cover in Hasdeo spans 1.70 lakh hectares, and due to its vast density, it was declared as a No-Go Area in 2009. The concept of Go and No-Go emerged in 2009-10, where areas with thick forest cover with potential for expansion were excluded from being mined and categorised as ‘no-go’ areas. Hasdeo has 20 identified coal blocks and four out of the nine coal blocks put up for auction fall under this definition.
In Hasdeo Anand, Chhattisgarh, sarpanches of 25 village panchayats have collectively declared that they do not want the auction to happen as it will impact huge forest land and their livelihood
“Gradually, over the years, the concept of Go and No-Go weakened and blocks on the fringes of Hasdeo were opened for mining. If the mining happens in these four blocks, high sedimentation will destroy the Hasdeo Bango reservoir and its catchment area. Human-elephant conflict will also increase as Hasdeo is home to thousands of wild elephants,” says Alok Shukla, convenor of Chhattisgarh Bachao Andolan.
Chhattisgarh environment minister had written to the Centre requesting exclusion of five blocks from auction since the area is environmentally sensitive. He also stated that the area around the blocks has been reserved for the proposed Lemru elephant reserve. Union minister for Coal and Mines, Prahlad Joshi, responded to the letter stating that the concerns of the matter will be set into investigation.
Bander block in Maharashtra and four blocks in Hasdeo Aranya area of Chhattisgarh were removed from the auction list from the time being due to environmental concerns.
Impact on environment and society
Hasdeo also has a large population of Gond tribal community, of which 90 percent depend on forest produce and agriculture for their livelihood. “Tribal women suffer the most due to thoughtless development. In the forest, they are completely self-sufficient. Due to the mining, women not only become more dependent on men but also have health issues such as complications during pregnancy, while, tribal children are being born with mental and physical impairment,” says Savita Rath, a social activist with Jan Chetana organisation in Chhattisgarh.
Coal has been a source for the rapidly changing climate globally. Pollutant emissions, land and water resource use, and public health and safety concerns are upfront issues. “In the mining areas, there is always a record number of rise in people suffering with cancer and respiratory diseases. It has been really challenging,” says Smita Patnaik of Nari Suraksha Manch, a grassroots organisation in Angul district of Odisha.
The Union government has said that the mining would generate employment for about 2.8 lakh people with direct employment for 70,000 and indirect employment for the rest besides leading to the development of far-flung areas. But activists are not impressed.
“Questions such as employment for how many people and for how many years are important to ask. All mining industries are being mechanised. At one point, Bhilai steel plant employed about one lakh people, it has come down drastically,” says Shukla. “Sustainable employment should be taken into account. These forests have sustained generations and in comparison, if the contract is temporary in nature, would it be worth uprooting millions of lives in its name?”
Questions such as employment for how many people and for how many years are important to ask. All mining industries are being mechanised. At one point, Bhilai steel plant employed about one lakh people, it has come down drastically
As the forest cover gets destroyed, displacement emerges as one of the major concerns. “Since forest area for elephants has declined, they venture into human settlements, killing about 200 people in 2019, damaging 500 houses and standing crops of more than a thousand farmers in the last six months,” says Ghosh. “The benefit of employment would be less as locals would not prefer to work on a contractual basis. In contrast, government-owned Coal India provided more security.”
Patnaik says there is hardly any compensation provided to those who have been displaced for coal mining earlier. “In one of the displaced families, only one of the three men got a job, that too on ad hoc basis,” she adds. “Child abuse and trafficking has also seen a steady rise in the mining affected areas due to displacement-induced poverty.”
Employment generation and displacement through coal mining have affected the family structure in rural areas, found a 2015 study done by National Institute of Technology (NIT), Rourkela, on the Mahanadi Coalfield, Odisha. Before mining, the share of nuclear families in the affected areas was 14.2 percent that gradually increased to 66.7 percent. The shift from agriculture, which ensured cohesiveness within the family, to individual employment changed these families characteristically.
Although mining is a transformative activity, it affects people’s livelihoods in the surrounding areas while the elite gain from this developmental process
“There are hardly any alternatives given to the families. They are mainly Class IV employees and their living conditions worsen as they are allotted to live in blocks as opposed to open spaces they were used to earlier,” says Sreedhar.
The NIT study also pointed out that although mining was a transformative activity, it affected people’s livelihoods in the surrounding areas while the elite gained from this developmental process.
“Women and children are the most affected. Men who work in mines come back home drunk most times, abuse their wives, some also married elsewhere, disrupting homes as well as incomes. Every year, we register about 300-350 such cases in our organisation,” Patnaik says. “In one of the villages, there were 22 widows whose husbands died due to work in coal mines.”
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