Privatising commercial extraction of Coal not beneficial for coal reserve states


The decision of the centre for privatize commercial extraction of Coal may not be beneficial for Odisha having 25 percent of the Coal reserve of the country. The plan to increase in mining activities is not being accompanying with rise in fair royalty rate and its share of state and locals. There has been persistent suffering of people in coal reserve areas due to mining for last few decades with very little enforcement of environmental legislations and entitlements for the affected people and areas as reparation against the loss and damage. The coal royalty periodic revision and its sharing depend on the centre as it comes under central Act. The centre must respect the spirit of cooperative federalism over resource ownership and its management as well as benefit sharing between centre and state and among local social groups.

During COVID-19, the recent move of the central Govt. with amendment of Coal mines special provision Act 2015 through ordinance, without any discussion at appropriate legislative forums, has allowed private sector to go for commercial extraction and the Govt. has been steadfastly going to ensure infrastructure out of public money to facilitate the private companies in extraction process for profit as Atam Nirvar Bharat. Privatize commercial extraction will allow the miner to trade the coal and coal based products in open market. There was virtual auction for 41 Coal blocks in five states where 8 are in Talcher and Chendipada of Angul district and 1 in IB Valley of Jharasuguda and Sundargada district of Odisha having highest geological coal reserve of the country. The formal processes of consultation with locals have not been followed as well as the various social, economic and environmental assessments also not being done as per rules. It is virtually the central Govt. who has taken it for granted that there is no need of consent of the affected people and other stakeholders. The state of Jharakhand having little more   Coal reserve than Odisha has gone to Supreme Court against the decision of the centre raising concern over environment and STs  .Both Odisha and Jharkhand have about 170 Billion tonne coal deposits which is about 50 percent of the total reserve of the country also have large  presence of STs and forest wealth.

With increase in extraction of Coal the coal reserve areas are going to get the most burden in terms of displacement and environmental issues as well as many ancillary problems emerged out of Coal mining and Coal based industries. Already the open caste Coal mining has caused huge displacement in the coal reserve areas. All most all major industries have been depending coal to run their captive power plants. Coking Coal has good demand for steel industries and mostly non coking coal is mainly used for Thermal power plants (TPP)  has a higher ash content .It as also uses in industries such as cement, fertilizer, glass, ceramic, paper, chemical and brick manufacturing.

It is being reported by many including Govt. officials ,environmental activists and others, concern local affected peoples forums, that the Coal extraction industry and TPP together has caused loss to locals and in coming days will bring more disaster in districts of Angul ,Jharasuguda and Sundergada. It will further change the local political –economy and environment with destruction of forest, top soil, perennial streams and increase land, water and air pollution as a huge area of land will be taken for mining along with Coal wash and fly ash management purpose. Past experience shows, fly ash management has brought disaster in Angul and affected many nearby villages and agriculture field .In spite of subsidies scheme for multiple use such as Bricks for fly ash management still its disposal has been continued as a major concern.  The NTPC along with private companies has a plan to setup more TPP for commercial purpose taking the advantage of availability of river water and Coal. While Thermal power is a reality in India since about 70 percent of our electricity generation comes from TPPs and 85 percent of TPP are Coal based. The search for other alternative sources of energy as substitute not being explored sufficiently. The fossil fuel burning has been globally a matter of concern in the context of climate change and many countries have aimed to close their coal fired plants such as Germany by 2038.

The Coal reserve areas in Odisha mostly dominated by farming communities, land, water and forest based small producers, farmers, Adivasies, Dalit and fisher folks who are also largely remain educationally and socially backward. The Coal areas Hemagiri of Sundargada is also a fifth schedule area where no rules of PESA and FRA and many other related acted in protection of STs under the provision of constitution are not being followed. The Laxmanpur block in Jharasuguda and Talcher, Chhedipada, Kaniha block in Angul district are no way developed blocks and lag behind all kinds of social development indicators .In spite of increasing mining and industries for last so many years even the basic problem of drinking water and sanitation has not been solved in these areas. The earlier villages are getting converted into slums. There has been no improvement in health and education of the people in the areas and slowly these areas remain difficult for living of the poor without land, housing and basic amenities for life.  The DMF which is established for last five years with huge money has remain unspent and diverted against its basic purpose. The CSR funds of industries in these areas also largely continue to unspent though people in these areas have been displaced and lost their traditional livelihood due to mining. The direct employment scope for the locals has not improved much due to discriminatory employment policy and non-implementation of protective legislations. The move of privatization of mining sector in general and Coal in particular will further pave the way for more privatization of public sector companies such as Coal India and Mahanadi Coal Fields Limited (MCL) while limiting its sole monopoly over Coal mining in Odisha. This is going to impact public sector employment scope for locals and its welfare activities for the people of Odisha and locals. Because private sector does not follow any employment policy that is socially inclusive and does not protect the interest of the affected and displaced. MCL has been a major player in Coal mining along with other companies having captive mines but MCL has provided direct employment to about 22,000 people as regular employee and many  contractual under private contractors along with its CSR activities. MCL has supported SUM hospital for 500 bedded  COVID-19 hospital and also help in purchasing  ventilators, PPE and also supported hospitals in its operational areas but the private companies in these  coal reserve areas  have substantially  done nothing in combat of  the pandemic while enjoying all the subside of Govt. in many ways. So experience shows the increase in private participation in mining and industries have not contributed much for the development of the locals as well as the state as whole rather the public sector companies have played a significant role in the economic change of the state.  It is expected that the mining affected states along with displaced and affected people in mineral reserve areas in the country must unitedly come forward to fight for their rights over resources and also against privatization of resources for the benefits for few industries at the cost of huge human suffering sustained as offshoot of careless mining.

Manas Jena is an activist and writer from Odisha email –[email protected]



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