- Highly dependent on coal mining and associated industries, Chhattisgarh’s Korba district produces about 16 percent of the country’s coal but is soon expected to face energy transition challenges due to ageing and unprofitable mines.
- A study by the International Forum for Environment, Sustainability and Technology (iForest) highlights that companies involved in coal mining and thermal power plants have over 24,364 hectares of land which should be repurposed to ensure a transition that is just for the environment and the communities involved.
- It calls for a scientific closure of mines, repurposing the land for renewable energy projects, and comprehensive planning to use the funds to plan for states losing significant revenues post the closure of coal mines.
Land is unarguably at the heart of India’s energy transition, but a clear policy for scientific closure and repurposing of land involved in coal mining and power projects can be key to ensuring that such a transition is ‘just’. A recent study that analysed Chhattisgarh’s Korba, which is India’s biggest coal-producing district and one of the top coal-power producers, revealed that currently there is over 24,364 hectares of land, equivalent to the size of Raipur city, with coal and power companies. A comprehensive policy for reclaiming and repurposing this land could set a template for the transition to a greener economy.
The study Korba: Planning a just Transition for India’s Biggest Coal and Power District was done by International Forum for Environment, Sustainability and Technology (iForest), a think-tank working on issues related to the environment and ‘Just Transitions’. It said India’s biggest coal and power districts will face energy transition challenges much earlier than anticipated and thus economic restructuring and development intervention will be essential.
The study noted that Korba, which produces about 16 percent of India’s coal and has 6,428 megawatts of coal-based thermal power plants (TPPs) capacity, will start facing the implications of energy transition well before 2030. In fact, coal mining, thermal power, and coal-dependent industries account for over 60 percent of the Gross Domestic Product of Korba, which is often called a power hub.
It further said that 41 percent of the people in the mineral-rich district are living below the poverty line and over 32 percent of the district’s population is ‘multi-dimensionally poor’ with limited access to healthcare, education, and basic amenities. It highlighted that a coal-centric economy has stymied the growth of other economic sectors, including agriculture, forestry, manufacturing, and services. Thus, the analysis said that “poor socio-economic status and high dependence on the coal economy make it highly vulnerable to the unplanned closure of mines and industries.”
The study outlined that nearly 95 percent of Korba’s coal comes from just three large open cast mines – Gevra, Kusmunda, and Dipka. Among those, Gevra and Kusmunda have a life of less than 20 years and can be closed before 2040 while Dipka will exhaust its resources by 2045. The rest of the mines – two open cast and eight underground mines – account for the remaining five percent of production and are unprofitable and on the verge of closure.
The study, which was released on February 16, said the coal-based power production in Korba will soon face a decline. “Nearly half of the thermal power units are over 30 years old and are slated to retire by 2027. Further, if we consider the life of power plants as 25 years, the remaining units can also be retired by 2040. Besides, the state government has also taken a decision not to install any new coal-based power plants. Therefore, the next few years will be crucial for planning and implementing just transition measures in Korba,” it highlighted.
Repurpose coal mines land in Korba for renewable projects
What happens to the land under the mines and such projects is going to be crucial for a district such as Korba as it is a Schedule V district – areas under the Indian constitution where land rights of the scheduled tribes have special protection. Over 40 percent of Korba’s population belongs to the tribal community.
The study said that a key determinant for industrial development in coal regions, including Korba, will be the “availability of land” and stressed that land acquisition in such areas “can be difficult given the history of land and community alienation and displacement”.
“Therefore, a key opportunity lies in redevelopment and repurposing of mining and industrial lands in Korba,” it said.
According to the analysis by iForest, over 24,364 hectares of land is currently under coal mining (including closed mines) and coal-based TPPs in Korba, and of that about 90 percent is related to coal mining (21,779 hectares). This excludes the four upcoming mines which will include an additional 3,300 hectares of land area. “Scientific closure and repurposing of this land, particularly for land available with the opencast mines, collectively hold huge potential for various economic activities,” the study said.
While talking about the post-closure mine land-use of four opencast mines – Gevra, Dipka, Kusmunda and Manikpur – in Korba, the study said, “nearly 8,859 hectare of land is available for various economic activities and investments.” It emphasised that closing down all eight unprofitable underground mines in Korba in the next few years is a win-win situation as the “resources saved can be diverted to start a just transition in Korba”.
Srestha Banerjee, Director, Just Transition at iForest said the “land used for coal mining, particularly opencast mining activities is a valuable asset to support economic diversification during just transition.”
“It can be repurposed and used for renewable projects, for horticulture, for fishing, or for tourism, etc. There are many possibilities to use this land for productive economic use in a ‘just transition’ and create jobs. It also will help to minimise land acquisitions and reduce alienation with forest dwellers or tribal communities. What we need is comprehensive land management and a repurposing plan which addresses the concerns of the environment as well as the local community” Banerjee, who is the lead researcher of the iForest’s study, told Mongabay-India.
Munna Jha, who works on Just Transition with Asar, an organisation that studies environmental and social challenges India faces as the country transitions to clean and sustainable energy, said “people on the ground who are actually impacted by such projects still do not understand the concept of a just transition.”
“Any programme that addresses clean energy transition in mining-dependent areas should address issues concerns of local people. What is needed is proper mapping of people who lost their land to coal mining or power projects even if 30-40 years ago or those who are directly or indirectly dependent on such projects for earning their livelihood. Once, such comprehensive mapping is done a proper programme needs to be devised for their betterment,” Jha, who was not involved in the iForest study, told Mongabay-India.
The study said “responsible environmental practices” will be key to ensuring just transition planning considering the pollution burden of the district. It called for a scientific closure of coal mines (progressive and final) including ecological restoration of mining areas, disposal of industrial structures and assets during the decommissioning of TPPs and other industrial structures through proper waste management including the closure of fly ash ponds.
Plan for states losing revenue post the closure of mines
For many of the states where coal mining and associated industries are the main pillars of the economic activity, the main source of revenue includes royalty and District Mineral Foundation (DMF) funds.
For Korba, the earnings of the state government from coal royalty and DMF contributions is about Rs. 20 billion per year. The other major revenue is the coal cess (currently the GST compensation cess) that goes to the central government. The study noted that “at the peak coal production of 180 MMT (Million Metric Tonnes), which will happen during 2025-2030, the state will get about Rs. 35 billion from royalty and DMF, and the coal cess will be about Rs. 72 billion.
“Overall, about Rs. 107 billion in public revenue will be contributed by coal mines in Korba. As coal mining activities phase down in the district over the next three decades, the state and the district will lose the royalty and DMF earnings. However, there will be an increase in revenue till 2030 and then it will start reducing. The revenue loss can be substituted through economic diversification and industrial restructuring measures, that will help in revenue generation from other economic sectors and industrial activities in the district,” the study emphasised.
In fact, Korba receives the highest amount of money under DMF in the country with a cumulative accrual of about Rs. 24.8 billion (as of August 2021). According to the DMF law, at least 60 percent of this fund must be utilised towards ‘high priority’ developmental and environmental issues that ail the communities in most mining areas.
The study said the DMF funds hold enormous potential for enhancing livelihood opportunities in the agriculture, forestry and fishery sectors, which are extremely important for economic diversification in Korba and for improving their contribution to the district GDP.
“In fact, DMF planning and investments, if aligned with just transition planning, can optimize the utilization of this fund, and be a win-win for the community as well as the environment,” said the study.
The iForest study said thus an “overall, revenue substitution must be planned early on, and carefully by the governments, including the state and the Centre” as the states will have to play a role in supporting the just transition, and a “declining revenue base can mean less funding for public services or increasing the tax burden on citizens”.
It noted that a “transition of the business portfolios” of South-Eastern Coalfields Limited (SECL) and NTPC, the two biggest companies in the district involved in coal mining and coal-based power production, will have an important role in ensuring just transition in Korba.
The study said Korba has an aging formal workforce as at least 70 percent of SECL and NTPC workers are 40-60 years of age. “Their retirement can be synchronised with plant and mine closures,” said the study while adding that the biggest challenge is the re-employment of informal workers and skilling for the new economy.
The study called for “diversification of these companies in the renewable energy sector” stating that investments in renewable energy businesses by the companies in Korba “will be helpful for creating local employment during the process of transition and absorbing a significant proportion of the coal mining workforce through retraining and reskilling.”
It said the repurposing of land assets of these companies for renewable energy investments can help in reducing “disruptions” and allowing an orderly transition in the district.
Asar’s Munna Jha, however, remarked that once the coal projects are over, the companies that earned billions of rupees from them would move to other states for renewable energy projects as acquiring land in the formerly coal mining areas is an issue.
Banner image: Korba accounts for about 16 percent of India’s total coal production. Photo by Mayank Aggarwal/Mongabay.