Auction of coal mines: Against all reason

Print edition : July 17, 2020

Prime Minister Narendra Modi launching the auction process of coal blocks through videoconference in New Delhi on June 18. Photo: PIB/PTI

Employees of Bharat Coking Coal at Jharia in Jharkhand during a token strike by coal workers on September 24, 2019. Photo: PTI

At the Gevra coal mines in Chhattisgarh, a 2009 picture. Photo: Rupak De Chowdhuri/REUTERS

The Central government appears determined to auction off the country’s coal resources despite the widespread opposition to it and the fact that the human and environmental costs of opening up the coal mining sector to commercial exploitation far outweigh the benefits.

IN one the biggest protest actions during the lockdown, five and a half lakh coal workers of Coal India Limited (CIL), a public sector undertaking, and Singareni Collieries Company Limited (SCCL), which is jointly owned by the Union government and the government of Telangana, will go on strike for three days from July 2 to protest against the decision of the National Democratic Alliance government to auction 41 coal blocks and open the coal sector for commercial mining.

The unions spearheading the strike are the Centre of Indian Trade Unions, the Indian National Trade Union Congress, the All India Trade Union Congress, the Hind Mazdoor Sabha and the All India Coordination Committee of Trade Unions. The Bharatiya Mazdoor Sangh, which is the trade union affiliate of the Rashtriya Swayamsewak Sangh, has lent its support to the strike. The protest will also involve the five recognised coal worker federations. On June 26, former Member of Parliament and Telangana Rashtra Samithi leader K. Kavitha led a protest of the Telangana Boggu Gani Karmika Sangham, the union of SCCL workers.

This will be the second protest by coal sector workers in less than a month. On June 10, 1.5 lakh coal workers in all the 535 collieries spread over eight coal-bearing States and offices of subsidiaries of CIL and SSCL held a one-day protest against a coal block auction scheduled for June 11. The government called off the auction process, but in less than a week it went back to its original plan.

The government also decided that the Central Mine Planning and Design Institute, a fully owned subsidiary of CIL, should be made independent of CIL in order to make its consultancy services available to private miners, a decision unions oppose. The 41 coal blocks up for auction include both fully explored and partially explored mines and four coking coal mines, all of them located in the States of Chhattisgarh, Jharkhand, Madhya Pradesh, Maharashtra and Odisha. Not only coal workers but also the governments of Chhattisgarh, Jharkhand and Maharashtra have objected to the auction on various grounds.

The trigger for the three-day protest was Prime Minister Narendra Modi’s launching of the process to auction coal blocks for commercial mining through a videoconference on June 18. The move, he said, would free “the coal sector from decades of lockdown”. The actual e-auction will take place in August, said D.D. Ramanandan, president of the All India Coal Workers’ Federation. “This is to give time to the bidders, most of whom are reluctant to invest due to problems relating to land issues and opposition from workers,” he told Frontline over telephone from Ranchi. It was, he said, a free-for-all. Anyone could bid for the auction, whether they had mining experience or not.

Both CIL and SCCL together accounted for 92 per cent of India’s coal output. In 2019, the government took two major decisions: allowing 100 per cent foreign direct investment in coal and allowing commercial mining. The auction process could not be held that year because of resistance from workers. The lockdown has given the government an opportunity to push the auction through.

The Prime Minister’s announcement was part of a series of announcements under the government’s self-reliance movement, or Atmanirbhar Bharat Abhiyaan. This, he explained, would reduce India’s dependence on imports for its energy requirements and generate lakhs of jobs for the youth. Apart from officials from the Coal Ministry, representatives of the Federation of Indian Chambers of Commerce and Industry (FICCI), including its president, and of industrial groups such as Vedanta and Tata Sons were present at the June 18 videoconference. While the representative of Tata Sons remarked that the decision was “one of the big stepping stones towards our journey towards a $5 trillion economy”, the FICCI president called it a “landmark reform” that would “unlock the country’s natural resources, stimulate the economy and catalyse India’s path to a $5 trillion economy”.

In his address on the occasion, Modi said State governments would get more revenue and that the coal sector reforms would make eastern and central India, the tribal belts in particular, “pillars of development”. Both regions had a number of aspirational districts and had not been able to reach the “desired levels of progress and prosperity”, he said. The NITI Aayog had categorised some 117 districts in the country as “aspirational districts” on the basis of their socio-economic indicators. There were 16 such aspirational districts, Modi said, that had huge coal reserves but the people there had not been able to get the benefit of the coal stocks.

The coal blocks auction would contribute substantively to projected coal production in 2025-26 and generate employment for 2.8 lakh people. Ramanandan told Frontline that private players would cut costs, steal coal from CIL mines and pay workers less. “Anyone who has a gutka business can start a coal mine under the new rules,” he said. The figures of projected employment were exaggerated he said. Even if employment was generated, it would be exploitative and workers would be made to work for 12 hours or more. “They postponed the auction on June 11 because there were no bidders. We protested, too, but they called it off because there were few takers. It takes five years to develop a block. No businessman will take that risk. Besides a shift to renewable forms of energy has begun the world over,” he said. The government also decided to spend Rs.50,000 crore to create infrastructure for coal extraction and transportation, which, according to the Prime Minister, would also create employment opportunities. Pralhad Joshi, Union Minister for Coal and for Mines, praised CIL for playing a key role in the energy sector and said that the production from all coal mines had registered a quantum jump in the last six years. The auction methodology and laws for commercial mining had been framed, Pralhad Joshi claimed, with “thorough stakeholder involvement”. The blocks had been identified after public consultation, he said and added that this was the “best time for private companies to enter the mining sector”.

Opposition to the auctioning of blocks and commercial mining has been widespread. In the second week of June, the sarpanchs of nine gram panchayats representing 25 villages in the Hasdeo Forest gram sabha area in Raipur, Chhattisgarh, wrote to the Prime Minister saying that the land and forests represented atmanirbharta for them and that by auctioning mining blocks to corporate entities, the government was helping private companies become self-reliant. They wrote that they were opposed to the auction process started on June 18 and reminded the Prime Minister that all the areas in the Hasdeo Forest were protected under the Fifth Schedule of the Constitution, the Panchayat (Extension to Scheduled Areas) Act, 1996, and the Forest Rights Act, 2006.

They also reminded Modi that when the government attempted a similar auction of coal blocks in 2015, 20 gram sabhas had passed a resolution opposing it and had informed his office about it. They wrote that they had remained consistent in their opposition but, with the lockdown in effect, could not convene a gram sabha. However, on the basis of discussions with tribal people and forest dwellers, it could be said that they were still opposed to the auction and were determined not to give permission for mining, which was a legal requirement. A copy of the representation (in Hindi) is with Frontline.

Expressing astonishment, they wrote that despite the ongoing COVID-19 pandemic, six mining blocks from their area were listed for auctioning. They reminded the Prime Minister about the eco-sensitive nature of the zone, which they said had been described in official documents as the “lungs of Chhattisgarh” as it had diverse flora and fauna, including a substantial elephant population. In 2010, the Hasdeo Forest area was declared a “no-go” zone as far as mining was concerned. They wrote that 18 out of 20 blocks came under the “inviolate” policy of the present government and that the maximum of “inviolate blocks” were in the Hasdeo Forest area. The “inviolate policy” being referred to was introduced in 2015, in Modi’s first tenure as Prime Minister, and it involved developing parameters to designate as “inviolate” forest areas that were critical habitats. On June 20, Mohammad Akbar, the Chhattisgarh Forest and Environment Minister, wrote to the Union Ministry of Environment, Forest and Climate Change about the increasing instances of man-animal conflict in the Hasdeo Forest areas and how mining would worsen the situation for both man and animal alike. On the same day, Chief Minister Hemant Soren of Jharkhand tagged the Coal Ministry and the Prime Minister’s Office in a tweet saying: “the decision to go ahead with commercial mining and coal block auctions without acknowledging our concerns around the potential socio-economic and environment costs and the impact on our forests and tribal population is a blatant disregard of co-operative federalism.” The same day, the Jharkhand government moved the Supreme Court challenging the virtual auction process on several grounds. First, the auctions were being held even though the Mineral Laws (Amendment) Act, 2020, had lapsed on May 14. (The Act amended the Mines and Minerals (Development and Regulation) Act ,1957, and the Coal Mines (Special Provisions) Act, 2015, allowing companies with no prior mining experience to participate in the auction of coal and lignite blocks. It liberalised the mining sector, allowing for the allocation of coal blocks in a wide geographical area. It also liberalised the criteria for participation in an auction process and licensing processes.) Second, what could be done in “Schedule Areas” falling under the State vis-a-vis the limitations specified in the Constitution needed to be factored in. Third, there was a need for a fair assessment of the social and environmental impact on the huge “tribal population” and vast tracts of “forest lands” of the State and on the residents who were likely to be adversely affected. Four, the negative global investment climate prevailing because of COVID-19 was unlikely to fetch reasonable returns proportionate to the value of the scarce natural resource through the impugned auctions for commercial coal mining. Five, the constitutional and statutory rights of the petitioner, that is, the State as a lessor flowing out of the Bihar Land Reforms Act, 1950, which has been placed at Serial Number 1 of Schedule IX of the Constitution, needed to be considered.

Addressing the media, Hemant Soren said that the decision to auction the coal blocks appeared to be an individual one and one-sided. The State government should have been consulted, he said, as mining was a sensitive topic in the State. He said that it appeared that there was an attempt to go back to the “old system”. “There should have been a survey of the benefits of mining in the State,” he said, adding that the Central government appeared to be in a hurry. Responding to a question, he said that the hurry could be because a few corporate houses had the government in their stranglehold. He expressed surprise that the government expected investors to come when the whole world was going through lockdowns and people were unable to travel, demand was at an all-time low and there was a marked slowdown in business.

Others echoed Hemant Soren’s sentiments. On June 22, Aaditya Thackeray, Minister of Tourism and Environment in the Maharashtra government, tweeted that he had written to Union Minister for Environment and Forest Prakash Javadekar opposing the proposed auction of a mine site near the Tadoba Andhari Tiger Reserve. “We cannot have the destruction of our wildlife corridors,” he tweeted.

The human and environmental costs of opening up the coal mining sector to commercial exploitation far outweigh the benefits and that is one of the main reasons for the opposition to it from the real stakeholders of the sector and the environment. The morality of pushing through the auction process when huge parts of the country are still battling COVID-19 is the other dimension to the government’s decision.