The Devastating Cost of India’s Push Towards a Coal-based Economic Recovery

excavators at an open coal mine
The Caravan
,
Jharkand, India

The Devastating Cost of India’s Push Towards a Coal-based Economic Recovery

“We came to know of it from Google—these days, you can find out everything on Google,” Prabhu Dayal Oraon, a 54-year-old resident of Basiya, a village in Jharkhand’s Latehar district, told me, in February, about the recent coal-block auctions. “If we sit and decide, nobody can do anything in our villages,” he said. “The governance of the parha raja is even recognized by the state. No bada babu can do anything. Article 244 gives us rights to manage our forests.”

Oraon is the parha raja of his community. A parha is a local politico-sacral institution that comprises a cluster of up to two dozen villages. Each parha is presided over by a chief, whose responsibilities include protecting his people and resolving conflicts over land. Article 244 of the Indian Constitution says that the provisions of the Fifth Schedule are to be applied for the administration and control of Scheduled Areas, identified by the government as having a sizeable tribal population and facing relative deprivation. These provisions include the establishment of Tribes Advisory Councils—such as parhas—which are to be consulted before making any regulations that pertain to Scheduled Areas, and allow for restrictions on the transfer of land in such areas.

Basiya abuts the Chakla coal block. In the commercial coal-block auctions that began in November 2020, the Chakla block was auctioned to the aluminum manufacturer Hindalco. More than eight hundred hectares of land will be diverted for mining. Residents of four villages—Chakla, Hariyatoli, Nawatoli and Ambuatanr—are likely to be displaced. 

women in a village
The expansion of coal mining will likely displace residents of four villages—Chakla, Hariyatoli, Nawatoli and Ambuatanr, as well as many others / Credit: Sushmita. 

In January and February this year, I visited the Chakla, Gondulpara and Urma Paharitola coal blocks in Jharkhand. While Hindalco had successfully bid for the Chakla block, Gondulpara had been auctioned off to Adani Enterprises, and Urma Paharitola to Aurobindo Realty & Infrastructure. Most people I met in these areas told me they did not know about the auctions. Nearly a year after the coal blocks were listed for commercial auctions, and three months after the bidding took place, they had not received any official communication.

The villages in the Chakla coal block are surrounded by onion fields, which create the illusion of a vast pink blanket, distinct from the surrounding vegetation. Fifty-five percent of the coal block is forest land, much of it inhabited by Adivasis from the Oraon and Munda tribes, as well as other Bahujan communities, who cultivate the land and depend on it for survival. An entire ecosystem and social structure that emerged as a result of this relationship with the land is threatened by the impending displacement. 

In March last year, the Indian government imposed a nationwide lockdown in response to the COVID-19 pandemic, causing significant distress and an economic downturn. As part of a stimulus package, the finance minister, Nirmala Sitharaman, announced on 16 May 2020 that coal-mining would be privatized through the “open-access auctioning” of coal blocks. Nine coal blocks in Jharkhand were included in the first round of auctions, without the approval of the state government or the communities whose land was up for sale. Four of these were auctioned off in the first round.

This was the first time that mining had been opened for commercial auctions since the nationalization of the coal industry in the 1970s. A policy change during the 1990s had allowed select private companies to mine coal for use in their industrial units, but, in its 2014 decision in Manohar Lal Sharma vs The Principal Secretary and Others, the Supreme Court canceled the allotment of 214 coal blocks. Many of the blocks listed for auction following Sitharaman’s announcement, including Chakla, belonged to that list.

The Supreme Court’s decision came two years after the comptroller and auditor general released a report on coal-block allocations between 2004 and 2009. The CAG estimated that the United Progressive Alliance government had incurred an opportunity cost of Rs 1.8 lakh crore and provided allottees a “windfall gain” by foregoing competitive auctions. The Bharatiya Janata Party, then in opposition, added “Coalgate” to its litany of corruption charges against the UPA government and demanded the prime minister’s resignation.

A little over a decade ago, Chakla was a site of deep conflict involving corporations, the local population, the police and Maoists. The Abhijeet Group, a Nagpur-based mining conglomerate, had been allotted a coal mine in the Chitarpur coal block, which neighbors Chakla, and was seeking to build a power plant in the district. After being rebuffed by locals in Chitarpur and Hempur, the company acquired three hundred acres of land directly from villagers in Chakla, rather than going through the government and community organizations.

“There were several irregularities in the transfer of land,” Hari Kumar Bhagat, a resident of Chakla and head of the local forest-rights committee, told me. “People weren’t informed properly, or they were given false impressions about the use of their land or the compensation that they may receive. The Abhijeet Group even got the lands mutated”—transferring ownership in property records—“in its name.” In May 2009, four security guards were killed at Abhijeet’s proposed power plant. A Down To Earth report quoted police sources as saying that “the company may have been using a renegade Maoist faction to coerce the villagers to sell their land,” and that the faction had turned on the company because of a dispute between the two parties.

“It seems very easy today, but those who organized against mining between 2004 and 2006 know the hardships that they faced,” Prabhu Dayal Oraon, who was imprisoned for several years for his activism, told me. “There was a very real threat to our lives, and people got killed also.”

In 2007, Essar announced plans to build a 1,200-megawatt power plant at Chakla. Essar, too, tried to win over landholders by paying huge sums of money to some of them. However, Essar’s plans could not take off either.

“You can still see the half-constructed plants here,” Oraon said. “Both went bankrupt and, after the 2014 Supreme Court order, this is the first time that the coal mine is opening again.”

train carriages full of coal
In 2020, the government declared mining an essential service during the lockdown and announced that coal-mining would be privatized through the “open-access auctioning” of coal blocks / Credit: Sushmita.

Chakla has a mixed population of Adivasis, Dalits and Muslims. The Adivasis feel that Essar and Abhijeet took advantage of the confusion between various groups over land-ownership and the provisions of The Scheduled Tribes and Other Traditional Forest Dwellers (Recognition of Forest Rights) Act, 2006, which recognizes the community and individual rights of communities living in forested areas.

When I visited the panchayat office, the voice of the Adivasi mukhiya, Ranjita Ekka, was almost drowned out by men from some of the dominant groups in the area, who seemed to have considerable financial standing. The non-Adivasis regularly referred to the forest-rights act as a land-transfer scheme, in which they thought land would be transferred to the Adivasis while they would be left without any options.

Work on the Abhijeet Group’s power plant was stalled for several years after the Central Bureau of Investigation implicated the group’s subsidiary JAS Infrastructure in the coal scam, in September 2012. The company eventually sought the intervention of the Jharkhand government to ensure the plant’s completion. The chief minister at the time, Arjun Munda, proposed commissioning the plant as a joint project with the National Thermal Power Corporation, with the State Bank of India lending the funds required. However, this fell through as well. In July 2016, the Asset Reconstruction Company (India) Limited took over the project for asset valuation. As of April 2017, there were no bidders for the plant.

“Since 2019, we have been hearing that there will be auction of around forty-five coal blocks,” 30-year-old Surendra Oraon, who lives in Chitarpur, told me. “Auctions have taken place only for Chakla, but we don’t know the process of the auctions or how they took place,” he said. Chitarpur’s auction was canceled in the first round, as only one bid was received for the block.

The auctions are only part of the Narendra Modi government’s efforts to facilitate the privatization of coal-mining. In 2015, a year after the Supreme Court order, the government amended the Mines and Minerals (Development and Regulation) Act, 1957 and passed The Coal Mines (Special Provisions) Act. The CMSP Act allowed successful bidders to receive not just a mining lease, but also title and rights over the land and mine infrastructure.

Three weeks before Modi announced last year’s nationwide lockdown, his government introduced the Mineral Laws (Amendment) Bill in the Lok Sabha. The bill, which replaced an ordinance that had been promulgated in January 2020, further amended the MMDR and CMSP acts. “With the amendments, environment and forest clearances along with other approvals and clearances shall automatically get transferred to the new owners of mineral blocks for a period of two years from the date of grant of new release,” the coal ministry said in a press release. The government also declared mining an essential service during the lockdown.

“The transfer of approvals is designed primarily to promote ‘seamless mining’ operations,” Kanchi Kohli, a senior researcher at the Delhi-based think tank Centre for Policy Research, told me. The amendments, she said, provide the new owners a two-year window to continue mining operations while applying for new clearances. “This assumes that addressing the pollution- or rehabilitation-related liabilities will not be a prerequisite for approval transfers. It also has little bearing on expansion of capacity to extract.”

The amendments violate the forest-rights act and the Panchayats (Extension to Scheduled Areas) Act, 1996. The PESA makes it clear that gram sabhas—village-level panchayat bodies—have the power to prevent alienation of land and take appropriate action to restore unlawfully alienated lands of a Scheduled Tribe. Further, the FRA recognizes the rights of forest dwellers to protect, regenerate, conserve and manage the community forest resources used by them and conserved for sustainable use. The FRA also gives gram sabhas the power to protect wildlife, forests and biodiversity, and to stop any activity that adversely affects these. These provisions, however, leave room for interpretation on how ongoing conflicts, such as Chakla, will be addressed. 

a group of men seated at a local panchayat meeting
The Mineral Laws Amendment bill violates the rights vested in village-level panchayat bodies such as this one, in Chakla / Credit: Sushmita. 

Although regulatory agencies are meant to review previous noncompliance with environmental and rehabilitative laws, such reviews have had little impact. Kohli pointed out that coal-mine expansions of up to 40% are exempt from public hearings—critical forums where communities affected by projects can bring crucial information to the attention of policymakers. In the absence of such hearings, she said, “the entire regulatory conversation is between two parties: the government and the project proponents.”

The result of such restricted conversations could be seen in the villages I visited. “When our land was being transferred to Abhijeet and Essar, we were misled, and documents such as the no-objection certificate for the transfer of our lands were forged,” Bhagat told me. “We had written letters to the sub-divisional officer, but so far no action has been taken.” He showed me some of the letters they had sent and said, “It appears that the forged NOCs will now be used while allocating the lands and transferring approvals to Hindalco.” He added that their claims to individual and community rights under the FRA were still being processed by the district authorities. In such a situation, the gram sabha’s consent is required before the land is used for other purposes.

Kohli put these violations in perspective. “The fresh coal auctions and expansion of existing mines are going to impact some of the most dense forest areas and fragile wildlife habitats,” she said. 

“These operations will have a transformative impact on local tribal economies and prevailing forest rights. What we will see is a project-by-project land acquisition, forest-land diversion and environmental approvals. There are many projects where these very approvals are at loggerheads,” she added.

Kuntala Lahiri Dutt, a leading global expert on the impact of extractive industries on communities, has been studying this issue for years. She called the allocations a cumulative land grab. “Each project gets sanctioned separately, and individual projects do not displace land use and/or village communities en masse, unlike large dams,” she told me. Although the FRA and The Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 govern the terms under which land can be acquired, she added, the “approvals process has been made much easier.” She noted that the government had turned environmental clearances into a cursory affair, while the state-run Coal India and private mining companies had “practically abolished” the earlier practice of giving jobs to those who lost land to various projects.

Besides easier approvals, the auctioning of coal blocks allows private corporations to mine coal without any end-use restrictions, allowing the companies to not only use the coal for their own industrial purposes but also sell it on the market. The government has also allowed foreign direct investment of up to 100% in mining companies. While launching the auction of coal mines, on 18 June 2020, Modi said that the “historic” auctions showed that economic activity in the country was fast returning to normal.

Analysts, however, remain sceptical about such projections. “Though the government is trying to use the forces of capitalism to lift the coal-mining industry, the auctions we’ve seen from November onwards [show] that private interest in this is not as strong as the government may have expected,” Aditya Lolla, a senior electricity-policy analyst at the London-based think tank Ember, told me. The coal ministry had initially planned to auction 41 coal blocks, but only 38 were listed in the first round. Of these, 15 received no bids while four others received only one bid, which meant that only 19 blocks could be auctioned.

The Rajhara coal block was central to one of Jharkhand’s biggest political scandals: in 2017, the former chief minister Madhu Koda was convicted of criminal conspiracy for allotting it to an obscure Kolkata-based company. This time, it was auctioned off to Fairmine Carbons Private Limited, which was established in July 2020—four months before the auction.

In June last year, the Jharkhand government filed a petition in the Supreme Court opposing the auctions. Besides citing the social impact of mining on the state’s Adivasi population and the environmental impact of converting large tracts of forest land into coal mines, the petition said that the auctions were unlikely to fetch “reasonable returns proportionate to the value of the scarce natural resource,” especially given the reduction in foreign investment during the COVID-19 pandemic. Jharkhand’s chief minister, Hemant Soren, tweeted that the union government’s decision to go ahead with the auctions without acknowledging the state’s concerns was a “blatant disregard of Co-operative Federalism.”

“We have heard that Hemant Soren has moved the Supreme Court against the allocation of our lands for mining,” Bhagat told me. “We are completely with him.”

In an interim order on the petition, passed on 6 June 2020, the Supreme Court said that, pending resolution of the case, “any action in the matter that may be taken by the defendant(s) (UoI) shall be subject (in accordance) to the orders of this court. The defendant(s) shall take care to inform any recipient of any benefit of any nature that the action is provisional in the sense that it will be subject to the orders that may be passed by this Court.”This means that the Supreme Court may cancel the allocation process in the final judgment if the auction is found to be illegal.

***

The industrial waste generated by coal-based power plants contains toxic chemicals such as arsenic, aluminum, antimony, barium, cadmium, selenium, nickel, lead and molybdenum, and can cause cancer as well as damage to the lungs and heart. Communities living close to these areas face chronic health conditions such as hair loss and brittle hair, joint pain, body ache, backache, skin disease and dry cough. Nevertheless, India has justified its continued use of coal-based sources of energy in the name of “development” and “poverty alleviation.”

a group of children look towards the camera in a village
India has justified its continued use of coal-based sources of energy in the name of “development” and “poverty alleviation” / Credit: Sushmita. 

India has the second-most coal-intensive electricity sector among G-20 countries, behind only South Africa. According to Ember’s most recent “Global Electricity Review,” released in March this year, coal is used to generate as much as 71% of India’s electricity—over double the global average of 34%.

Shortly before the Paris conference of the United Nations Framework Convention on Climate Change, in December 2015, the Indian government declared that it would install 175 gigawatts of renewable energy by 2022. As of 31 May, data from the Central Electricity Authority showed that the country’s installed capacity of renewable energy—including solar, wind, biofuels and small hydroelectric plants—was 95.65 gigawatts, which means that India would need to nearly double this capacity by the end of next year to meet this target.

India’s climate-change policy, as articulated in its Paris targets and the 2008 National Action Plan on Climate Change, does not include an end to the use of coal. At Paris, the government promised only to increase the share of renewables in power generation to 40 percent by 2030 and to decrease emissions caused by the coal industry by making coal-washing—reducing the ash content in coal through a mix of segregation, blending and washing techniques—mandatory in all new thermal plants. Even this requirement for “clean coal” has now been lifted. In a gazette notification issued on 21 May 2020, the environment ministry made coal-washing optional, despite the occurrence of 76 major coal-ash disasters in the past ten years.

“The important aspect of this debate is the cynical argument that India makes about coal being instrumental to alleviate poverty and all that,” Prakash Kashwan, an associate professor of political science at the University of Connecticut, told me. “What is important to point out is that [the] Indian government is not serious about that promise of poverty alleviation.”

“India is an energy-poor country, which justifies its aggressive attempts to expand its electricity-production base,” Dutt told me. Although the country has made “serious investments” in renewable energy and is “committed” to the Paris agreement, she said, much of its recent growth in electricity production has come from coal. 

“India talks renewables, but walks coal,” said Dutt.

In a video message for an event organized by The Energy Resources Institute, in August last year, the UN secretary general, Antonio Guterres, criticized India for the coal-block auctions and for continuing to subsidize fossil fuels. “Clean energy and closing the energy-access gap are good business,” he said. “They are the ticket to growth and prosperity.”

“I think the next two years will be crucial for India in terms of how it fares with its climate-change commitments,” Lolla, who co-authored the Ember report, told me. Sunil Jain, a veteran renewable-energy professional, said on a recent episode of the podcast The India Energy Hour that the “Indian fall had already started in 2019 … By August 2020, supply chain started getting squeezed.” India added about 3.5 gigawatts of new utility-scale solar capacity in the financial year 2020–21, almost forty percent less than in 2019–20.

“In the West, the growth in energy demand has plateaued,” Sandeep Pai, an energy researcher at the University of British Columbia’s Institute of Resources, Environment and Sustainability, told me. “But, in India, we are still witnessing a surge in energy requirements. Many areas are yet to be electrified.” As a result of this imbalance, he explained, even as developed nations begin to decommission old plants, countries like India, where the plants are relatively new—many of them less than two decades old—are not in a position to do so. “Some of them haven’t even paid back their investments yet, and mostly to the public-sector banks,” he said.

Pai added that, in such a scenario, “it’s debatable” whether India should build more power plants. “The research community is divided on this,” he said. He also highlighted legacy issues. “Some of the mines haven’t been functional, despite having been started decades back,” he said. “If they have not started functioning so far, then when will they start functioning?”

The road to transitioning away from fossil fuels is neither easy nor smooth. Pai elaborated on the idea of “just transitions,” which has gained momentum in recent years. “For some people, ‘just transitions’ involves everything,” he said. “At some stage, solar and wind power is going to become more accessible as battery prices come down.” This, he added, would have grave implications for states that depend on fossil fuels.

“Coal power is expensive; when coal plants are closed, how will states like Jharkhand derive revenue?” Pai said. “Can we start planning now so that, when coal actually starts to decline, these states are not left in a state of complete deprivation? Already they’ve suffered the consequences of lack of planning. In states like Jharkhand, 5-19% of the revenue comes from coal power.” He called for “coordination between the central, state, district authorities and other stakeholders” to navigate a just transition to renewable power.

clothes hung to dry in a field
When coal starts to decline, energy researchers fear communities in states like Jharkhand will suffer in the absence of a just transition / Credit: Sushmita.

Even as the government argues that climate-change adaptation cannot come at the cost of poverty alleviation, recent research has shown that the pursuit of climate-change mitigation is not necessarily at odds with economic justice. A paper published, in January, by the journal Global Environmental Change used household-expenditure data, rather than national averages, to “more accurately assess conflicts between poverty alleviation and climate mitigation in India.”

Although there is high correlation between household expenditure and carbon footprints, the authors found, the increased carbon footprint was mainly from higher food and electricity expenditure. “To alleviate the climate impact, the shift from coal power plants to renewable electricity and supply chain emission reduction of food products are key,” they wrote. Moreover, they estimated that the eradication of poverty would cause India’s carbon footprint to increase by less than two percent.

Prakash Kashwan said that the government’s insistence on positing development and climate-change management as incompatible, and its plans to pursue a net-zero emissions target only by 2050, “means that Adivasi lands, including biodiverse forest areas, will be sacrificed for the sake of carbon forestry. This will lead to the further exacerbation of the historical injustices that Adivasis have faced at the hands of India’s political and corporate elites in the past.”

Responding to a question about the adverse impacts of commercial coal mining on the environment and communities, raised in the Lok Sabha on 3 February, the minister of coal and mines, Pralhad Joshi, merely laid out the standard procedure of preparing an environmental-impact assessment rather than actually addressing the impact of mining. The coal and environment ministries did not respond to questions I sent about how ongoing disputes over environmental clearances would be settled, or how the impact of coal-based development would be mitigated.

In an article for the Economic and Political Weekly, Kashwan and Arpitha Kodiveri, a doctoral researcher in law at the European University Institute, note that it might be understandable that the coal ministry and the industry would have vested interests in prioritizing and expanding coal mining at a time when solar power is 14 percent cheaper. “However,” they ask, “why would the Ministry of Environment, Forests, and Climate Change (MoEFCC) support these projects by engaging in a frenzy of regulatory clearances? Why is the MoEFCC so oblivious to public interests in mitigating pollution and environmental degradation more broadly?”

Instead of addressing these concerns, the government further modified the auction process—choosing to compromise on the competitiveness of the process in the face of waning interest. In March 2021, the coal ministry kicked off what it called a “rolling auction” regime, in which bids for coal blocks can be received at any time. “Even if only one person shows interest, we will go for auction,” Joshi said at an event held to launch the auctions. “If only one person participated, then we will put the same block up for auction for a second time, and if the second time too no one else makes a bid, then we will allot the mines to that single bidder.” This has called into question the very grounds on which the allocation of coal blocks was cancelled by the Supreme Court in the first place.

“It is evident that only a mass political movement can force Indian government to do a course correction,” Kashwan said. “The international community is exploiting the presence of an authoritarian regime in control of an ostensibly democratic country to get away with continued violation of the rights of indigenous and other rural people.”

“When people are displaced because of the mines, not only do they lose their lands, but their culture, traditions, customs also disappear,” Bhagat told me. “Does the government have any record of the number of people who have been displaced in these areas? The mines eat us away. This is a do-or-die fight for us.”

coal factories in silhouette
For Indigenous and rural communities in India's coal belt, the fight against mining corporations and the government's new amendment is a struggle for survival / Credit: Sushmita. 

This story was produced with the support of Internews' Earth Journalism Network. It was originally published on 31 July 2021 in The Caravan and has been lightly edited for length and clarity.

Banner image: Excavators load soil onto trucks at an open coal mine near Mahagama, Jharkand / Credit: Xavier Galiana (AFP/Getty Images). 

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