Photo: Kevin Frayer/AP Photo
In energy-hungry India, demand for coal has increased while production has remained fairly steady, causing coal prices to surge in recent years.The lack of reform and rising demand have spawned a seedy underbelly of “coal mafia”, and a class of workers that illegally scavenge the mines for coal.
*The nationalization of India’s coal industry made it legal for just the central or state government to authorise coal mining.
That basically means coal can only be mined by government-owned companies or private companies that have been granted a lease by the government. But there are many poor Indian’s that haven’t benefited from riches in the mining sector and that choose to dig the open-pit mines illegally.
Kuntala Lahiri-Dutt at the Research School of Pacific and Asian Studies explains:
“Illegal mining takes three main forms in eastern India: small shallow-dug village mines on private land, mining on re-opened abandoned or orphaned government mines, and scavenging on the leasehold land of official operating mines.Â
This is just based on the source; there may not be any major difference in their production amounts. There are also a few “unregistered” mines: those that somehow escaped enlistment during nationalisation and became illegitimate.”
And Indian policymakers have been mired in coal scams and illegal mining themselves.
India’s comptroller and auditor general (CAG) has accused the government of losing $210 billion in potential revenues by selling coal fields to top industrialists and giving the companies “undue benefits” in what has been dubbed the “Coalgate scandal”. And some officials have been accused of profiting from the illegal exports of iron ore.
Indian state-owned miner Coal India has repeatedly warned investors that the proliferation of illegal mines could see its stockpiles diminish.
It’s not unusual to see women and children work the unsafe mines with the most rudimentary tools. Most are drawn to it in the hopes of earning a better income. And with Indian coal demand expected to rise to 1 billion tonnes by 2017, illegal mining is unlikely to die out anytime soon.
*Note: The piece was updated to include the nationalization of India’s coal industry.