The coal ministry is reaching out to other ministries to put an end to the exercise of classifying coal fields into ‘go’ and ‘no go’ areas according to their forest cover. The ministry has circulated a Cabinet note, which make the argument that mining should be allowed across the country wherever there are proven coal reserves . In the meantime, the coal ministry has rallied end-user ministries like power and steel around it.Put together, the ministries appeared to have painted a grim picture of slowing growth prospects. It is argued that paying too much attention to environmental concerns would in effect lead to “curtailment of energy source”. This move would “ultimately result in the country missing growth opportunities.”Building up the pressure, the steel ministry has asked that alternate coal blocks be allocated for its projects. In a letter to coal secretary C Balakrishnan earlier this month, steel secretary PK Misra has asked that coal blocks allocated in “no go” areas be swapped for blocks that can be mined. The ministry has argued that most of the allottees in the steel sector have “already made substantial investments in the end-use projects”.
The steel ministry has argued that “any hindrance” in the development of these coal blocks will affect the economic viability of the projects. The steel ministry has made it abundantly clear that the forest classification exercise will have adverse impact on the economy. The steel secretary wrote, “blocking the development of these coal blocks by categorizing them under “no go” area may not only adversely affect these on going steel projects, but may also impact future investments in the steel sector due to the shadow of uncertainty looming over the availability of this critical raw material.”
The power ministry has said that the exercise would put 660 MT coal out of reach every year. This would impact 1,30,000 MW of capacity. The ministry has cited that power developers have already spent . 27,384 crore and committed . 11,578 crore in end-use projects and . 589 crore in coal-related activities.
In its rush to maximize the production capacity of the state-owned Coal India, the coal ministry appears to have forgotten about the Forest Conservation Act, 1980. The forest law requires that all diversion of forest cover for uses that can be described as “non-forest” require the approval of the Forest Advisory Committee (FAC). The ‘go’and ‘no go’ exercise that the coal ministry is now objecting to does not do away with the FAC process.
The exercise was more in the nature of a time and resource saving executive device. The “no go” – “go” exercise is an effort to ensure efficient investment decisions, which would aid coal mining companies to focus on projects in areas that would not be rejected by the FAC. A senior environment ministry official said, “It makes no material difference to the outcome if the go/no-go exercise is aborted unilaterally . All projects go through the FAC process irrespective of the go/no-go exercise.”
A section of government is of the view that the coal ministry’s objections are based on a faulty understanding of the clearance process. “All projects involving forest areas have to be considered by the FAC before work can begin. This is not going to change,” an environment ministry official said.
The idea of demarcating coal blocks with forest cover as “go” and “no go” was floated by the ministry of coal and the Coal India Limited. A fact that the coal ministry piloted Cabinet note also acknowledges . The reason for this suggestion , a senior ministry official said, was to ensure that coal mining companies such as Coal India did not invest money and time working on prospecting and mining plans in areas where projects were unlikely to be given permission.
All projects in areas that involve diversion of forest land need to be considered by the Forest Advisory Committee. The idea was that CIL would not spend time working on plans in areas where permission for mining was unlikely to be given. A senior government official close to the development said that “the exercise was taken up at the instance of the coal ministry and CIL. The results were unexpected and Coal India recoiled and backtracked.”
In its Cabinet note, the coal ministry says “any new criteria at this stage that causes us to reassess our resource base will not only push the power generation growth plans of the country but will also have its effects in the future when the climate change issue becomes more stringent.
Thus on the whole, it will only result in precious loss of time for building up our power generation capcity and energy supply capacity.” The ministry has argued that the initial study of nine coal fields put 203 of a total of 603 blocks in the “no go” category. A move that would put 660 MTof coal every year out of reach.