India’s plan to revive its flailing economy by boosting coal production is deeply flawed

Giving a boost to the mining sector, especially commercial coal mining, and bringing in reforms to attract more investment into the sector is the direction taken by the government in its announcements intended to revive the economy following the pandemic. But a boost to mining brings with it associated troubles such as land conflicts, run-ins with communities and an impact on the environment.

According to the official government data, India produces over 85 minerals including coal, lignite, bauxite, chromite, copper ore and concentrates, iron ore, lead and zinc concentrates, manganese ore, silver, diamond, limestone, phosphorite etc. India is the second-largest producer and importer of coal in the world. Over the decades, the value of mineral production has also risen and, as of 2015-’16, stands at around Rs 2.82 trillion. There are over 3,500 mining leases that are in force in the country across 23 states covering an area of 316,290.55 hectares. Of those, nearly 70% are in five states alone – Madhya Pradesh has 702 mining leases, Tamil Nadu has 464, Andhra Pradesh has 453, Gujarat has 432, and Karnataka has 376.

In June, while launching commercial coal mining in 41 coal mines, Prime Minister Narendra Modi said India will turn the Covid-19 crisis into an opportunity and he hailed it is a major step in making the country self-reliant in the energy sector. However, the government’s decision has not inspired much confidence in investors as they feel auction in time of pandemic is a dampener. Instead, they have sought extension of the auction by a few months.

Nandikesh Sivalingam, who is the Director of the Center for Research on Energy and Clean Air, a think-tank working on clean energy issues, emphasised the extent of coal generation in India saying that the country has Coal India Limited, one of the largest coal producers in the world, that is aiming to cross one billion tonnes of coal production alongside importing coal, which is not going to stop.

“We are witnessing a scenario wherein power assets are not being able to produce power and banks are writing off loans given to them. If we are not careful enough about coal production, we may see a similar scenario in coal mining as well because everyone would be producing more coal including CIL [Coal India Limited] at a time when there is a lack of demand. As a simple business case, in today’s scenario, an increase in coal production is quite challenging,” he told Mongabay-India.

A ‘just transition’

The government’s launch of coal auctions for commercial coal mining once again triggered the debate around transition to clean energy. The shift to renewable energy from coal is one of the main pillars of a transition that is deemed to be fair to communities, protects health and environment and boosts growth. Moreover, it is also part of the global efforts to cut down on coal to control climate change. India has promised 175 GW of renewable power by 2022 and at least 350 GW by 2030. At present, India’s overall installed renewable capacity is 87.66 GW and of installed solar power capacity is around 35 GW.

However, the push and focus on renewable do not mean India is cutting down its focus on coal. According to Coal India Limited, in the next five years, it is going to open 55 new coal mines and expand at least 193 present ones. Together, these two steps will ensure an increase of 400 million tonnes in coal production. CIL has about 463 coal blocks with which the country can continue thermal power production for another 275 years.

Karthik Ganesan, who is a research fellow at the Council on Energy, Environment and Water, said, “India’s coal demand could grow by up to 30% by 2030, and we need to source that coal and have reliable supply options.”

“The new mines being auctioned are aimed at servicing the existing and under-construction plants. Across the world, there is increasing adoption of renewable energy which is displacing coal, and amidst that glut, global coal prices [naturally] must come down. Maintaining our import dependence, in such a scenario, would be a prudent move. We need a transparent exposition of the costs and benefits of our move to open up more mines. This has not been forthcoming, and that is the basic requirement of large investments in infrastructure that most other countries mandate,” Ganesan explained.

“Opening up ecologically sensitive and pristine forests could irreversibly damage our biodiversity endowments, risk our water sources and affect millions relying on these forests for their livelihoods,” he said.

Ganesan also emphasised that the recent coal auctions are unlikely to have any implications on India’s renewable energy goals and roll-out. “The growing share of renewable electricity, mainly solar, was driven in recent years solely by the cost decrease of PV panels. The increasing adoption from here on will be driven by lower risk perception, and the increasing dispatchability [reliability] through emerging storage technologies,” he said.

On a query regarding a “just transition” to cleaner energy, Sivalingam said, “globally countries are moving towards renewable as it means cleaner and cheaper power.” “If we put money where it matters, a transition that is just for the environment and people at large is not difficult to achieve. There is no dearth for opportunities but what we need is political and business will.”

Impact on tribal communities

India’s Minister of Commerce and Industry Piyush Goyal recently announced that the government is bringing in reforms in the mining sector to increase economic activities. But a closer look at the mining statistics reveals that the country’s major mineral area is under its richest forests and in the watersheds of its key rivers which are also the homes of India’s poorest people, mainly tribal communities and forest dwellers. India’s track record so far in dealing with their concerns as mining is pursued vigorously, is ridden with conflicts and doesn’t inspire much confidence.

There are, in fact, enough rules and laws to ensure that in areas where mining is being done, the environment is protected, water bodies are not polluted, mined-out land is reclaimed and communities get justice. Earlier this year, following an order of the Supreme Court of India, the union environment ministry passed an order making it mandatory to carry out re-grassing in the mined-out areas once the mining activity is over to make them suitable for the growth of flora and fauna.

In reality, these rules and laws are not always implemented effectively. Scores of mines across the country are left abandoned without proper reclamation. “Expansion of coal mining also means opening up of deep forests which doesn’t make sense and probably better could be to mine more from existing mines,” Sivalingam said. “What needs to be understood is that coal, iron ore and bauxite, which are the mainstay of our mineral production, are mainly in forests. But it doesn’t even make a business case to open up pristine forest areas as we don’t have demand for finished products that we need to go big for raw material. If more areas are opened, it is only going to get more challenging in terms of opposition from communities and impact on environment and wildlife.”

Land conflicts

An aggressive push for coal mining has led to cases of conflicts with local communities, point out experts. For instance, a report by Land Conflict Watch, a research group, recorded 703 conflicts across India affecting the lives and livelihoods of 6.5 million people. Among these, after infrastructure, land conflicts over mining projects are the second highest cause of distress, with 852,488 citizens affected by them. On average, each land conflict impacts 10,668 people but land conflicts involving mining projects affect the highest number of people – on average, each one affects 21,312 people.

Sushmita, an independent researcher working on issues of forest rights and climate change, said, “mining-related activities have caused enormous distress and trauma to communities, especially Adivasis [tribal people] and forest dwellers.”

“One of the worst effects of mining across countries has been the mass displacement of people from their residences,” Sushmita told Mongabay-India. “Apart from displacement, there is the problem of pollution, many areas have been rendered uninhabitable or heavily polluted because of such activities, and yet more and more extractive industries are being pushed for. For instance, the IB valley in Odisha or the Jharia coal mines in Jharkhand. Moreover, such activities and forceful displacement have given rise to on-ground conflicts or exacerbated tensions in many areas already suffering from various structural issues like lack of education, healthcare, etc.”

She stressed that in a situation when a pandemic such as Covid-19, a zoonotic disease, has been staring at us in our faces, “we need to think of alternative ways of development or collectively deliberate on new development paradigms.”

“It’s really hard to think of any such examples, in which all rights of people were settled, they were rehabilitated at a place of their choice, adequate compensation and livelihood opportunities were provided etc. Moreover, all extractive [mining-related] industries have only meant doom for the environment, biodiversity and the poorest of the poor. I think we need to ask the question/s, how much is really required? For instance, studies say that India had sufficient supply of coal from its existing coal mines to last several years, then what is the reason for the new zeal to push for coal auctions?” she questioned.

On the government’s massive push to the whole mining sector, she said, “the thrust is misplaced”.

“Why is mining publicised as a solution to all the problems people are facing? The government is saying these industries will generate jobs, now we all know the precarious nature of these so-called jobs. Cheap labour will be hired in precarious conditions of on-site stay and no security,” she said.

This article first appeared on Mongabay.