Sucking More Oil & Gas From Moscow, Firing Up Coal Plants: How India Runs The Economy
Pungent fumes wafted from the deep pit that cuts across the landscape like a small, blackened version of the Grand Canyon. Trucks with sooty cargo rumbled along roads snaking toward the rim, far in the hazy distance.
Dibyajiban Si pointed excitedly at a map. Soon, this vast canyon — the fastest-growing coal mine in India — will stretch even farther into the surrounding plains.
“It will expand beyond this horizon. … This is the fastest excavation of 300 million tons in India,” said Si, the project manager of the Bhubaneswari mine. “Whatever targets they give us, we achieve it ahead of time.”
Here in eastern India, the Bhubaneswari mine is a testament to India’s vast coal reserves, among the largest in the world. The mine’s rapid expansion also is vivid evidence that the world’s second-largest consumer of coal is not ready to give it up, despite urgent concerns about the toll its use is taking on the climate. If anything, India’s coal production is accelerating, according to Coal Ministry data.
At the 2021 global climate forum in Glasgow known as COP26, India publicly promised a “phase down” of coal. But that doesn’t actually mean that India will use less — only that it will gradually generate a smaller proportion of its overall energy with coal. In absolute terms, the country expects its coal production and consumption to expand dramatically as its energy needs skyrocket in the coming decades because of economic growth.
In recent years, the Indian government has reopened old coal mines, carved out new ones, and, perhaps most telling, extended contracts to private mining companies for longer periods, suggesting that the country’s leaders won’t be ready to give up coal for at least 25 years, government officials and coal industry executives say.
“Our energy needs are first and foremost. The share of other sectors like renewable energy is not keeping up with our energy demand. Therefore, our dependence on coal is established,” Indian Coal Secretary Amrit Lal Meena said in an interview. “Whatever we produce is consumed. Every coal mine matters.”
The country committed itself last year at COP27 in Egypt to rely on fossil fuels for no more than half of its power capacity by 2030. But the share of electricity generated using sources other than fossil fuels has not increased for more than a decade and remains below a fifth of total power generation, according to data from the Power Ministry.
“When you take a step back and ask, ‘Is renewable energy [hitting] the targets?’ The answer is, unfortunately, no,” said Rahul Tongia, the author of the book “The Future of Coal in India.” “The backstop remains coal, even more so.”
The Indian government has set a target of producing 1 billion tons of coal in fiscal 2024, which ends in March 2024, up from 700 million tons produced so far in the current fiscal year ending next month. It is urging mining companies to excavate coal as quickly as possible because electricity demand is projected to soar. India is still connecting millions of remote homes to the power grid and, over the next two decades, expects to add as much new power generation as the amount now used by the entire European Union, according to the Paris-based International Energy Agency.
“Keep it in the ground is a very Western concept,” said Rohit Chandra, an assistant professor at the Indian Institute of Technology in New Delhi who studies energy. “New renewable energy can only supply part of this growth for now. … We are decades away from coal playing an insignificant role in India’s power system.”
Pressure to accelerate mining
The Bhubaneswari mining site, near the town of Talcher, is estimated to contain 1 billion tons of relatively shallow coal, beyond the 300 million tons being excavated. The government plans over the next 25 years to triple the size of the mine to 3,700 acres and swallowing up 17 adjacent villages in the process. At the current rate of mining, the coal should last 35 years.
The government in 2011 awarded a 15-year extraction contract to Essel Mining, part of the Aditya Birla conglomerate. This was a new approach in India, and it has since then become much more common, with the government seeking to hasten coal production by turning operations at publicly owned mines over to private companies, mostly under 25-year contracts. Companies also have been given permission to own mines themselves, furthering the privatization of the sector.
After the outbreak of the coronavirus pandemic, when fuel supplies at Indian power plants ran low, the government gave the coal industry even more incentive to ramp up production by easing regulations.
At the Bhubaneswari mine, public officials and company executives say there is palpable pressure from the government to accelerate extraction operations. “The pressure is coming,” said Si, the project manager, a mustachioed man wearing a white hard-hat. He added, “As long as there is demand, we have to take it out. And that will remain for at least 20, 30 years.”
During colonial times, India’s British rulers ran three mines in the Talcher area. After Indian independence in 1947, there was little coal exploration in the surrounding area, now known as Odisha state, and only in recent years did it become a site of renewed mining activity.
Today, officials in New Delhi, the Indian capital, are enthusiastic about the Bhubaneswari mine because of its immense size and the easy access to its shallow — albeit low-quality — coal. In the surrounding villages, residents boast that they can dig two feet to find coal, which they call “fire stone” in the local language.
Outside the nearby Hingula mine, villagers frequent a temple built around a fire from an underground source, said by believers to be the Hindu goddess Hingula herself. Other locals say the fire is most likely the result of coal being exposed to oxygen and spontaneously igniting.
“It’s the natural gift of this place,” said Rajinder Singh Malhotra, an Essel Mining executive in Odisha.
Lives and livelihoods tied to coal
Indian officials say they have no option but to mine. While energy companies have begun investing in renewable sources, the amount of funding is not nearly enough to make a substantial dent in the use of fossil fuel. And although India is the world’s third-largest emitter of carbon in absolute terms, it is one of the lowest emitters per capita and bears little responsibility for the past century’s emissions, which have been pumped into the atmosphere mostly by industrialized countries, officials note.
Moreover, coal mining is essential to the livelihoods of many thousands of Indians. “Talcher’s mines are now at their heyday of productivity,” said Suravee Nayak, a researcher with the New Delhi-based Center for Policy Research who is from the Talcher region and has focused on coal mining there for a decade. “The local communities’ futures for generations are very much entangled with the existence of the coal mines.”
Around Talcher, many of the public buildings were constructed by Mahanadi Coalfields Ltd. (MCL), a state-affiliated company that owns much of the region’s mines. Schools and hospitals often bear its logo. Most of the workers in the area are employed in the mines or in businesses that support the mines and their labor force. Everyone says living standards have risen since mining arrived, driving economic growth evident in plush hotels and glass-walled restaurants.
The India government will sell up to 10 per cent stake in the blue chip Coal India Ltd (CIL) through offer for sale on Friday and is expected to mop up around Rs 24,000 crore at current market price.
"The (CIL share) sale shall...commence on January 30 and shall close on the same date at 3.30 pm," CIL said a stock exchange filing. The offer will have 20 per cent reservation for retail investors.
The floor price for the stake sale would be announced after the close of market hours.
Coal India would be second company to hit the markets under the government's disinvestment programme. In December, government sold 5 per cent stake in SAIL to garner over Rs 1,700 crore.
For the current fiscal, the government has budgeted to raise Rs 43,425 crore through disinvestment in PSUs.
Of course, there is also the mining dust.
“But no one wants the dust to end. The day the dust settles, that means the mines have died down,” said Soubhagya Pradhan, a Talcher-based retired union official and MCL employee. “The day the mines die down, that’s the day our home stoves will also die down.”
There is no doubt that coal mining over the past decade has taken a toll on many villagers and their surroundings. At the hamlet of Arakhpal, because of the dust, the palm trees have turned black and farming has ceased. Locals complain about new illnesses. And Arakhpal is about to lose 100 acres of land to the mine, adding more families to the 12,000 that Nayak, the think tank researcher, says have lost land to mining in the Talcher area. But mining still has wide support.
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“Our national resource is coal. My land is only six feet deep. Whatever is below is the government’s. The quicker you take it, the better,” said Dinabandhu Pradhan, the head of the Arakhpal village government.
Unlike many villagers near mines elsewhere in India, almost all of the residents interviewed in the Talcher area say they actually wish more of their land was taken for the mine. They complain that the land with which they have been left is no longer arable and that they deserve the new employment and compensation that further acquisitions would offer.
In the village of Hensmul, which is perched on a long peninsula jutting into the pit with a panoramic view of the canyon below, residents say they will not move until promises of new homes and compensation are fulfilled. But, even there, villagers say coal is a source of national pride.
Pradhan says it is not up to foreign leaders — which he called “rajahs,” or rulers — to tell India what to do with its resources.
“The rest of the world’s rajahs are saying coal must stop,” said Pradhan. “But we are the rajah of our own country.”
(WAPO)