The Adani Group has told shareholders that it is relinquishing two coal blocks in the central Indian state of Chhattisgarh. The group acquired the Jhigador and Khargaon coal blocks at auction in August 2021. It now claims that approvals by the Chhattisgarh government for the proposed mines have faced unacceptable delays. Is Adani playing hard ball to pressure Chhattisgarh to approve these projects more quickly? The two coal blocks occur close to one of India's most critical areas for tiger conservation. Meanwhile, another coal block in the state has been removed from the latest round of coal-block auctions.
The Adani Group has announced its relinquishment of two coal blocks in central India ostensibly because the government in the state of Chhattisgarh, where the mines are located, has not provided the necessary regulatory approvals. However, this reason seems to be far from convincing. The business conglomerate has not only acquired a new coal block in Chhattisgarh during the last financial year but is also competing with other corporate entities in the ongoing auction in which more coal blocks in the state are up for grabs.
(In the latest news, the central government has removed one of these coal blocks from the March 2023 round of coal-blocks auctions)
At present, Chhattisgarh is under the rule of Congress, the principal political opponent of the BJP central government of Prime Minister Modi.
The disclosure about foregoing the two blocks, Jhigador and Khargaon in northern Chhattisgarh, was made by the group’s flagship company, Adani Enterprises Limited, in its annual report for the financial year 2022-23. The company claimed that it has ‘temporarily’ suspended operations on the two mining projects owing to the delay in approvals.
‘Mining projects at Jhigador and Khargaon coal mines are temporarily suspended. The Group has been following up with the Government of Chhattisgarh and Ministry of Coal (MOC), Government of India for grant of prospecting license cum mining lease without which it cannot proceed for the mining activities. Considering the delay in getting the said license, the group has submitted relinquishment letter to MOC and is awaiting response,’ states the company’s annual report (See Page 380).
The Adani Group acquired Jhigador and Khargaon – with reserves of 250 million tons each – in August 2021 during an auction conducted by the Modi government in which successful bidders are free to sell coal extracted from the mines at the highest rates without any end-use restrictions.
Given the Adani Group’s hunger for coal – it is operating at least 16 coal mines across the country either as contractor or proprietor – its strategy to drop two rich deposits from its portfolio of assets is perplexing. Nine of its 16 coal mines are located in Chhattisgarh where Adani’s coal-mining business is concentrated. Could it be a case of the Adani Group playing hard ball by threatening not to proceed with projects where approvals have not eventuated as fast as the company would like? Or have the operations been suspended in order to focus operations in areas where the costs of mining are lower?
‘The decision by the Adani Group to temporarily suspend operations at Jhigador and Khargaon is a clear indication that the country has more blocks for mining than the demand for coal,’ Chhattisgarh-based lawyer, Sudiep Srivastava, told this correspondent. ‘Corporates obviously prefer blocks where mining costs are minimal.
‘The Adani Group had preferred the Tara block in the forests of Hasdeo Arand because it is contiguous with three other coal blocks where the company is already under contractual obligation with a public-sector power generating company to operate the mines.’
However, according to the latest press reports, the Tara block has now been removed from auction. On 26 July 2022, the state assembly of Chhattisgarh passed a motion to oppose new coal mines throughout the Hasdeo forests, which includes the Tara block. The central government appears now to have at least partially taken cognisance of the state's motion.
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The power-generating company that Srivastava referred to is Rajasthan Rajya Vidyut Utpadan Nigam, owned by the government of the northwestern state of Rajasthan. It has appointed the Adani Group as Mine Operator & Developer (MDO) – a concept of contractual mining that the business group has pioneered in recent years – for the three Hasdeo mines, namely, Parsa, Parsa East & Kente Basan (PEKB) and Kente Extension. Srivastava also said most of the infrastructure needed for mining is already present in this region where the business conglomerate has been operating the PEKB mine for more than ten years.
An Adani Group subsidiary, Raigarh Natural Resources Private Limited, which was incorporated in August 2022, bid for the Tara block in the latest round of coal-block auctions. Successful bidders are allowed to sell coal without any end-use restrictions. On 29 March 2023, the Modi government issued a notice inviting bids for 101 coal blocks for commercial mining. Adani's subsidiary was amongst three bidders for the Tara block, which has estimated reserves of 337 million tons of coal, but which has now been removed from the auction.
Sudiep Srivastava accused the central government of pandering to the greed of corporates by auctioning more mines in the Hasdeo forests at a time when the Adani Group has placed two other blocks in Chhattisgarh under suspension.
Jhigador and Khargaon are separated by yet another coal block called Shankarpar Bhatgaon II Extension which covers an area of nearly 34 square km and remains unallocated.
The Jhigador block covers 39.71 square km, of which 31% (12.3 sq km) is forestland. Similarly, the Khargaon block is spread over 40.11 square km, of which 21% (8.42 sq km) is forestland. (A whopping 81% of the Tara block’s 24.2 square km, on the other hand, is forestland!)
The two blocks are roughly 20 km from the boundary of the eco-sensitive zone of the Tamor Pingla Wildlife Sanctuary, a protected area, in the Surajpur district of Chhattisgarh.
To the northwest of Tamor Pingla lies another protected area, the Guru Ghasidas (Sanjay) National Park, straddling a number of districts in north Chhattisgarh. The region that contains these two protected areas is covered with dry deciduous forest that is rich in flora and fauna, including tigers, leopards, hyenas, jackals, wolves, sloth bears, barking deer, chinkara and chital. Significant rivers of central India such as the Hasdeo, Gopad and Baranga originate in this area. A number of biodiversity-rich areas, notified as ‘protected’ by the government of India, are located in this region, including the Semarsot Wildlife Sanctuary in the Surguja district of Chhattisgarh and the Dubri Wildlife Sanctuary in the Sidhi district of Madhya Pradesh.
In October 2021, the National Tiger Conservation Authority (NTCA) approved the Chhattisgarh government’s proposal to declare the combined areas of Guru Ghasidas National Park and Tamor Pingla Wildlife Sanctuary, spanning 2830 square km of contiguous forest, as a Tiger Reserve. However, in June 2023, it was reported that the Chhattisgarh government had temporarily halted the notification, ostensibly at the behest of its natural resources department, which pointed out the adjacent presence of rich deposits of coal and other fossil fuels. A geological report prepared by a public-sector enterprise under the Union steel ministry, which was part of the bid documents, states that Jhigador is only 3.2 km away from this tiger reserve.
Sources revealed that, earlier this year, the Chhattisgarh government sought the opinion of the central government – the Union Ministry of Coal and the Union Ministry of Petroleum and Natural Gas – before issuing the final notification on the tiger reserve, given the underground resources present in the area. This occurred as a backdrop to a public interest litigation (PIL) filed in the Chhattisgarh High Court in 2019 alleging that the state government had been delaying the notification for more than two decades.
‘Nowhere else does the government seek the opinion of petroleum and coal ministries before notifying a tiger reserve,’ the petitioner, Ajay Dubey, told this correspondent.
‘Tiger reserves are invariably located in areas that are rich in natural resources. This seems to be a tactic on the part of the government to deliberately delay notifying the reserve.’
According to the PIL, in June 2011, during the rule of the United Progressive Alliance (UPA) coalition government in India, the then Union environment minister, Jairam Ramesh, asked the Chhattisgarh government to formulate a proposal for declaring the region as a tiger reserve, given its importance for the conservation of the big cats. In May 2012, the Chhattisgarh government, which was under the BJP rule at that point of time, resolved to constitute the area as a tiger reserve. In August 2014, when Narendra Modi won power, the Chhattisgarh government’s resolution was sent to the NTCA for its approval. The NTCA resolved in September 2014 to notify the tiger reserve but did not issue a notification until seven years later.
A study commissioned by the Union Ministry of Environment & Forests (‘the ministry’ as constituted under the former regime) said that declaring the entire region a reserve would ‘be extremely beneficial for tiger conservation and will provide much needed economic benefits to the local communities that eke out a meagre living in the area’. The study titled Status of Tigers, Co-predators and Prey in India, 2010 (p.81) stated in no uncertain terms that the entire region comprising Guru Ghasidas National Park, Tamor Pingla Wildlife Sanctuary and Semarsot Wildlife Sanctuary should be integrated into a single tiger reserve.
Historically, the region extending from Bandhavgarh in Madhya Pradesh through northern Chhattisgarh to Palamau in Jharkhand has been a tiger corridor. Even more importantly, the report recommended that priority should be accorded to ecological conservation rather than opening up the coal blocks in the densely forested region.
‘This landscape is rich in minerals, especially coal and is earmarked for mining. The least-cost pathways shown herein provide guidelines for the minimal habitat required for maintaining corridor connectivity between the Protected Areas. These need to be secured before they are destroyed by developmental projects to ensure the continued value of these forested landscapes as repositories of biodiversity for future generations.’ (p.81)
Madhya Pradesh leads the country with a total tiger population of 785, according to a report released by the Indian government on 29 July 2023 on the occasion of International Tiger Day. It says that the Bandhavgarh-Palamau tiger corridor stands fourth overall amongst all reserves in the country in terms of tiger population. It has 135 tigers. The report states that with a total number of 3682, India has 75% of the world’s tiger population.
Further, the tiger census report compiled for the year 2022 by the NTCA states that the central Indian highlands and Eastern Ghats, of which the Bandhavgarh-Palamau corridor is a part, is increasingly threatened by mining activities.
‘The region is home to the largest population of scheduled tribes who rely on forest lands, and it also has some of the best tiger habitats in India … However, the high concentration of mining activity poses a significant challenge to conservation. The region contains five biosphere reserves and is home to the largest number of tigers and contains the largest tiger-occupied forest in the country. The forests of this region are under threat from various activities, despite their high biodiversity and conservation significance,’ states the Status of Tigers 2022 report.
A critical corridor used by tigers for movement between Tamor Pingla Wildlife Sanctuary and the Semarsot Wildlife Sanctuary in Surajpur district is also within a 20 km distance of the two coal blocks.
On the occasion of the 50th anniversary of India’s Project Tiger, a government program for the conservation of the big cats, Prime Minister Modi said in April 2023 that India has many unique achievements in wildlife conservation because it is ‘a country where protecting nature is a part of the culture’.
‘India has not just protected tigers; it has also given them an effective ecosystem for their growth. Importance is given to the coexistence of economy and ecology here,’ Modi said.
Apart from potentially serious impacts on wildlife, the Jhigador project is also expected to affect at least three streams that not only provide groundwater recharge but also help meet the needs of local communities. Of these three streams, the Jhanpi Nala flows in the southern part of the Jhigador block while the Chhur Nala flows in its northern part. The Galphuli Nala forms the eastern boundary of the Jhigador block. A major river of central India, the Mahan River, flows to the north-west of the block into the adjoining state of Madhya Pradesh.
The Mahan River and a local stream, the Pasang Nala, might also be impacted by the Khargaon mining project. Hydrology studies should occur before the two projects proceed.
The Jhigador project will potentially displace farmers and destroy agricultural land in at least eight villages. Social-impact assessment studies are yet to be conducted for the villages of Dumariya, Bundiya, Chikni, Jhigador, Pandridana, Korandha and Songara. Similarly, the Khargaon project will affect three villages – Maridand, Kerta, Chera – of Surguja district.
The Jhigador and Khargaon blocks belong to the Adani subsidiary, Chhattisgarh Natural Resources. As per the consolidated financial statement of Adani Enterprises Limited, this subsidiary, formerly known as Adani Iron Ore Mining Private Limited, had net assets of Rs 0.11 crore (US $ 13,400). While the company reported total assets of Rs 7.82 crore (US $950,000), its total liabilities were to the tune of Rs 7.71 crore (US $937,000) and it reported no profit at all during the financial year (See Pages 459 and 474).
In addition, the Adani Group acquired the Purunga coal block in Chhattisgarh in March 2023. This block covers 8.7 square km in the state’s Mand Raigarh coalfields and contains around 260 million tons of reserves.
Numerous calls and text messages were made by this correspondent to the mobile phone of Chhattisgarh’s Special Mining Secretary, Jai Prakash Maurya, to ascertain the veracity of Adani’s allegations that the state government has not been forthcoming with regulatory clearances for the two coal blocks. No responses were received at the time that this article was published.