August 10, 2020 Read More →

Indian coal mining states express concern over Modi recovery policies

India is opening up commercial coal mining to the private sector after five decades. Mining rights to 40 coal mines are on offer in auctions currently underway.

The winners will have the right to mine and sell coal to any firm globally, a change from an earlier regime where only Indian companies in the steel, cement and thermal sector were allowed to mine coal for use in their own industrial units. For the first time, even foreign-owned companies will be able to bid for coal mining rights in India.

In June, announcing the auctions, Prime Minister Narendra Modi used the new coronavirus pandemic vocabulary, claiming his government was bringing coal out of “decades of lockdown”.

However, Jharkhand has raised concern over the timing of the move. Nine of the 40 coal mines being auctioned are located in the state. In a suit filed in the Supreme Court on July 3, the Jharkhand government has challenged what it calls “farcical auctions,” arguing that it stands to lose vital forest cover, its tribal communities will be displaced, and yet it hasn’t been consulted. Worse, it points out the coronavirus pandemic will dampen global participation in the auctions and keep bid prices low. 

Said Tim Buckley, Director of Energy Finance Studies at the Institute for Energy Economics and Financial Analysis: “India has long sought to improve the efficiency and productivity of its mining sector. The last thing India needs now is rogue operators who will inevitably through ignorance, incompetence or willful negligence, take shortcuts with potentially severe consequences.” 

[Supriya Sharma]

More: Who benefits from Modi government’s commercial coal auctions? Not coal mining states

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