A Look at Mining Area Rules That Have Sent the Coal & Power Sectors in a Tizzy

What are `go’ and `no go’ areas? 

The environment ministry has categorised mining regions into ‘A’ or `no go’ areas where coal mining is prohibited and `B’ or `go’ areas where ministry could permit mining subject to other statutory clearances.

How has the environment ministry categorised these areas? 

The categorisation of mining regions into `go’ and no go’ areas has been done on the basis of a study conducted by the environment ministry in nine major coal fields of the country. The areas were demarcated by superimposing coal-bearing areas and forest areas as per the records of coal and environment ministries. So the forest areas (as per records of the environment ministry) covering coal bearing regions identified by the coal ministry were categorised as `no go’ areas.

What is the implication of this categorisation? 

The study has labelled almost 48% mining areas identified by the coal ministry in the nine coal fields as `no go’. This has put 203 coal blocks in these coalfields in the barred list. Over 600 million tonnes per annum of coal production capacity (about 400 mtpa from Coal India Ltd’s areas and over 200 mtpa from captive blocks) will get affected.

Will it also impact power projects? 

Yes, as 70-80% of country’s coal production is currently consumed by power stations. The coal ministry has estimated that under the new categorisation, domestic coal production would not reach 1,000 mtpa in the next decade. It would remain at 400 mtpa level (loss of 600 mtpa) against a projected demand of 1500 mtpa by then, thereby severely impacting several existing and upcoming power projects. The 600 mtpa of coal could support about 1,50,000 MW of power capacity which is equal to country’s current generation capacity.

Is there a change in stance of the environment ministry with respect to this categorisation? 

The Prime Minister’s Office is looking into the matter to balance environmental concerns and development goals. The environment and coal ministries now seem to have agreed to permit coal mining in such `no go’ areas where there is no contiguous forest or the forest density is thin and where some mining activities are already taking place. This could release 77 out of 203 coal blocks barred for mining but still keep a substantial portion out of bounds for mining. Mining in these areas will be permitted by putting additional burden on companies to prevent environment degradation.