Modi government allowed Adani-run mine to expand though Wildlife Institute recommended against it

This article has been updated for accuracy.

The Modi government greenlighted the clearance of about 3,000 acres of forest land in Chhattisgarh for the expansion of a coal mine operated by the Adani Group, even though a government-funded study found that coal extraction was not as per the mining plan.

Between May 2019 and February 2021, two government institutes – the Indian Council of Forestry Research and Education, and the Wildlife Institute of India – conducted a biodiversity study in the Hasdeo Arand coalfield in north Chhattisgarh. The coalfield gets its name from the Hasdeo Arand forest, one of the last unfragmented forest landscapes in Central India.

Among other things, the study examined the ecological impact of the Parsa East and Kanta Basan mine, one of the two operational mines in the forest. Allocated by the coal ministry to Rajasthan’s state electricity company, the mine is operated by the Adani Group, which also holds 74% stake in its profits.

The study noted that the mine had yielded a smaller-than-expected volume of “overburden”, or soil removed to access coal seams, “indicating mine development is not commensurate with quantum of extraction of coal as envisaged in the mining plan.”

In the report, the Indian Council of Forestry Research also noted that the opening of “a long mine face for extensive mining has seriously impacted the land degradation.”.

It recommended that the impact be minimised “by undertaking intensive mining... up to the bottom of the ore body”.

In the same report, the Wildlife Institute of India highlighted the ecological costs of mining in the area and recommended that the “mining operation may only be permitted in the already operational mine of the block” – that is, the expansion proposal be rejected.

Despite that, the Modi government cleared the expansion of the mine in February 2022. However, protests by Adivasi residents have forced the Chhattisgarh government to put the expansion on hold.

A controversial arrangement

The Adani Group has been excavating coal from the Parsa East and Kanta Basan mine since 2013 on behalf of Rajasthan’s state electricity generation company, Rajasthan Rajya Vidyut Utpadan Nigam Limited, to whom it was originally allocated.

It is common for government companies to outsource mining to private firms. But the agreement between Rajasthan and the Adani Group is contentious: Rajasthan didn’t just sign up Adani as a mining contractor, rather it entered into a joint venture agreement with the company, giving it 74% stake. The agreement dates back to 2007 when the Bharatiya Janata Party ruled the state.

After the Supreme Court cancelled all coal block allocations in 2014, the government freshly allocated coal mines to state companies. Most state companies discontinued old contracts and invited fresh bids from private miners. However, Rajasthan continued its old joint-venture agreement with Adani. As a result, it has been paying a significantly higher price for the coal, the bulk of the profits going to Adani, the Caravan magazine reported in 2018.

In addition, an investigation by Scroll last December established that some of the coal excavated from Parsa East and Kanta Basan is firing up the Adani Group’s own power plants.

Regardless, Rajasthan, now ruled by the Congress, has steadfastly pushed for an expansion of the project. In September 2020, Rajasthan Rajya Vidyut Utpadan Nigam Limited wrote to the Union environment ministry, claiming that coal reserves had almost run out in the 762-hectare area of the Parsa East and Kanta Basan mine that had been cleared for mining in the first phase of the project. To ensure steady coal supply to its power stations, it asked the environment ministry to expedite the mandatory forest clearance required for the second phase of the project, which would necessitate the felling of almost 2.5 lakh trees over an area of 1,137 hectares, and would entirely displace the forest village of Ghatbarra.

In February 2022, the Union environment ministry granted its approval for the expansion project – under the Forest Conservation Act, 1980, no forest land can be cleared in India without the Centre’s approval, even though the final order is passed by states. However, the Chhattisgarh government, facing pressure from a sustained people’s movement seeking protection of the Hasdeo Arand forest, has put tree felling on hold.

Those campaigning against the expansion of the project say the biodiversity study further enhances the case to restrict mining to the already dug-up belt. “It’s a travesty that in such an ecologically sensitive area, the mine is not being utilised to capacity, and at the same time there are plans to expand the area of mining,” said Alok Shukla, an activist at the forefront of the anti-mining protests in Hasdeo Arand.

Questions were sent to the Adani Group, the Rajasthan government, and the Union coal ministry. No responses were received at the time of publication.

‘Selective mining’

The Parsa East and Kanta Basan mine consists of six coal seams with a combined depth of 225 metres. All the mineable coal – 452.46 million tonnes – lies in the three seams (seam VI, V, VI).

According to the government-approved mining plan, to extract the total available coal reserves in Parsa East and Kanta Basan, about 2,362.72 cubic metres of overburden would have to be removed. This adds up to an average overburden of 5.16 cubic metres per tonne, known in mining parlance as stripping ratio.

But the biodiversity study found that the overburden produced at the site was much lower. The report noted:

“As per approved mining plan and mine closure plan cumulative stripping ratio envisaged up to 8th year of mining is 4.13 cum/ton. However, it is found that up to September 2020 (9th year of mining operation) total overburden generated is 146.32 million cum and coal extracted is 63 million tonnes, which amounts to stripping ratio of 2.32 cum /ton, which is much lesser than envisaged stripping ratio indicating mine development is not commensurate with quantum of extraction of coal as envisaged in the mining plan.”

Sudhir Kumar, deputy director at the Indian Council of Forestry Research and Education, who led the study, said a stripping ratio lower than envisaged in the mining plan usually meant either “very high quality of ore” or “selective mining”. In the case of Parsa East and Kanta Basan, Kumar said, it was the latter since the mining company had “not explored the entire area”.

“We have suggested that the area be completely explored for sustainable mining,” Kumar added.

Of the 452.46 million tonnes of mineable coal reserves in the Parsa East and Kanta Basan mine, the company had extracted 42.73 million tonnes of coal till March 31, 2019, the report of the biodiversity study said.

When the expansion proposal was considered in a meeting held at the environment ministry in January 2022, production data showed 80.39 million tonnes had been extracted between 2012-’13 and 2021-’22. The sanctioned capacity, however, was 120 million tonnes for the same period, according to minutes of the meeting.

Shripad Dharmadhikary, analyst at the energy and environment non-profit Manthan Adhyayan Kendra, said that companies want new areas opened because “it’s a good way to expand your footprint and corner more coal resources”.

Corrections and clarifications: An earlier version of this story misstated the order of the coal seams, and erroneously concluded that the bottommost seam had not been mined. The story has been amended to correct the errors. We regret the errors.

The Adani Group emailed a statement of response on April 21, 2023. It has been reproduced in full below.

Your original report of 18 Apr 2023 undermined the regulatory framework, technical prudence and, above all, the Mining Plan through which the Ministry of Coal governs the sector. That version of your report was short on relevant facts, long on baseless assumptions and displayed a lack of understanding of the highly regulated mining sector.

We are aware that you have removed some of the more contentious arguments and allegations from the original article and that you have replaced the first version with an amended article that you claim has “been updated for accuracy”.

The amended version (as it now appears on your website at the same url mentioned above with a changed headline) does not reflect the facts as it should. Below, we address a few of the unsubstantiated claims that you have chosen to let stand in your amended article:

Your (amended) statement:

The Modi government greenlighted the clearance of about 3,000 acres of forest land in Chhattisgarh for the expansion of a coal mine operated by the Adani Group, even though a government-funded study found that coal extraction was not as per the mining plan.

The facts:

You have selectively referred to a part of the report by the Indian Council of Forestry Research and the Wildlife Institute of India out of context. It is unfortunate that your story completely undermines the approved Mining Plan and banks on vested elements having no idea or experience of mining operations.

The Forest Advisory Committee had already considered the reports by government bodies while allowing the diversion of forest land for expanding the PEKB Block. This land was already part of the PEKB Block when the Mining Plan was drawn up. By unreasonably relating the diversion of forest land with the present government, you are mischievously trying to create a clickbait headline.

Once the Mining Plan is approved by the Ministry of Coal, it is obligatory for the coal block owner to mine all the minable reserves and then back-fill the void. The mining leaseholder is not allowed to leave the coal seam unmined over the life of the mine. Hence, in spite of your amendment, your claim that the extraction was not as per the Mining Plan is utterly invalid.

Your statement:

Rajasthan didn’t just sign-up Adani as a mining contractor, rather it entered into a joint venture agreement with the company, giving it 74% stake.

The facts:

RRVUNL, the Rajasthan government’s power generation utility, floated a competitive bidding tender in 2006 to select a partner to form a joint venture (JV) company with equity stake of 74% for the JV partner and 26% for RRVUNL. The JV company would be the mining contractor for development and operation of its captive coal block while the ownership and mining lease of PEKB Block would remain with RRVUNL. You have conveniently ignored the legitimacy of this structure.

Your statement:

[A] stripping ratio lower than envisaged in the mining plan usually meant either “very high quality of ore” or “selective mining”. In the case of Parsa East and Kanta Basan, Kumar said, it was the latter since the mining company had “not explored the entire area”.

The facts:

PEKB Block is a fully explored coal mine at G-1 (highest) level, as per UNFC classification, and had established a much higher reserve than the original government estimates. Over the years, the production capacity of PEKB Block was ramped up to meet Rajasthan’s growing electricity demand.

The mine benches are not being developed to their full width due to the constraints related to land availability. This is resulting in mine operations with a lesser Strip Ratio. Once land is available, the mine benches will be developed with an enhanced Strip Ratio. Eventually, at the end of the life of the mine, the cumulative Stripping Ratio will be as per the approved Mine Plan. It is important to note that “Selective Mining” or any deviation from the approved Mining Plan is not permissible.

The fact is that PEKB Block will continue to operate till 2047, as per the approved Mining Plan, in a phased manner and no extractable coal will be left out. PEKB Block is only 10 years old and is being developed and operated most prudently, which won it the 5-Star rating from the Ministry of Coal three times consecutively, in 2019-20, 2020-21, and 2021-22. This rating recognizes compliance and performance on seven key parameters including mining operations, safety, and environment, among others.