This story has been re-published with the permission of The Morning Context. In it, Nihar Gokhale outlines the connection between the Adani Group's railways and its addiction to coal. The ownership of coal railways in Australia and India by Adani Ports and Special Economic Zone has embedded that company in the global coal industry and all its destructive impacts. Nihar Gokhale writes The Crucial Years, a weekly newsletter on the environment and climate crisis.
It was in Goa, sometime in mid- or late-2017, that I hit upon a bewildering set of corporate transactions. Outside, the west coast’s wild monsoon swayed coconut trees and swelled the creek behind my house. Inside, I had just accessed documents from the Ministry of Corporate Affairs database (after paying Rs 100) that made my heart skip a beat. The documents showed that billionaire Gautam Adani’s family had taken control of one of the Adani Group’s lucrative businesses—a railway line to carry coal. It had been described as the largest and first private railway siding in India, one that would carry coal from Adani-operated mines in northern Chhattisgarh to the nearest station on the Indian Railways network. While the mine was partly in the Adani Group’s control (through a joint venture with a government entity), it held complete control over the railway line.
I am no corporate wiz, but it seemed odd that Gautam Adani personally made a few hundred rupees for every tonne of coal that left the Chhattisgarh mines (and a few hundred even if no coal was moved). Roughly around this time, I had accompanied a team from the Australian Broadcasting Corporation, which was reporting for an episode on Adani for its investigative program called Four Corners (a trip that ended abruptly after we were questioned for over five hours by the Gujarat police’s crime branch in Mundra, and told there’d be worse if we didn’t leave the town ASAP). The Four Corners program revealed that in Australia too, the Adani family had either a direct or a joint stake in the railway line that transported coal from its Carmichael mine, and the entire coal capacity of the port from where it would be exported. There too the railway and port infrastructure can serve other coal mines in the region.
In case you missed it, in the story published by The Morning Context, I reported how the family has now sold the Chhattisgarh railway line to Adani Ports & SEZ, the listed entity running the Adani Group’s ports and other rail projects, at a valuation of Rs 5000 crore (around US $654 million), calculated based on the discounted cash flows from the projected future revenues of the line.
You can get further details on the project in the story, but here I intend to discuss a connected issue—the absence in the public discourse on coal of transport infrastructure, the various financial incentives it is linked to, and its environmental impact, which can be as damaging as coal mining.
The opening up of new coal mines and thermal plants is seen as a way to keep countries such as India and Australia beholden to coal, since all these endeavours require hefty investments and revenue streams running into decades. They create financial incentives and political capital to stick to coal as the primary energy source, even if a less-damaging alternative were to become more viable and suitable. But coal-carrying infrastructure can also support similar addictions as businesses increasingly own (and earn large incomes from) such facilities.
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For much of India’s history, coal was mined and transported by government entities. It was imported at government ports and moved by the Indian Railways. But in the last two decades, much of these have been privatised. While this is likely to have avoided the inefficiencies of a government-run system, tying corporate profits to coal transport has undoubtedly created greater incentives to continue with coal for as long as these investments in infrastructure are not recovered.
For instance, for the six years that the Adani family owned the railway line, the future of the Chhattisgarh coal mine was directly tied to their need to grow their wealth. Since the railway can serve future mines in the vicinity, the family had a direct incentive in the opening up of the Hasdeo Arand coalfield, despite concerns over forest and land loss. Even now, shareholders of Adani Ports & SEZ have an incentive to push for coal mining in Hasdeo because now they stand to earn directly from its transport.
Over the last decade, the Adani Group has built several facilities for coal import. It runs port terminals exclusively for coal import at Visakhapatnam and Mormugao (in Goa) while its ports at Dhamra (Odisha), Kattupalli (Tamil Nadu) and Mundra (Gujarat) also deal significantly in coal. It recently acquired Krishnapatnam port in Andhra Pradesh, which is also a major gateway for coal imports. All of these operate based on 30- to 40-year concession agreements and project finance that assumes a revenue stream of that duration.
For all its ambition to decarbonise its steel business, the JSW group—India’s top steelmaker—is also invested in a captive coal import terminal at Mormugao port. Since coking coal used in steelmaking is not produced much in India, it has to be imported through such port facilities and hauled by rail and road to steel mills. It made sense for JSW to have its own terminal, to cut down on import bills. In recent years they have sought to double the sanctioned capacity of the terminal, despite opposition from local residents who complain about dust that rises from the offloading operations there and subsequent transportation.
That brings us to the other aspect of coal infrastructure that is less appreciated, and which is relevant to both private- and state-owned infrastructure. When it comes to air pollution, our attention is towards obvious emitting sources like thermal plants, vehicles or crop fires. The transportation of coal, too, creates multiple nodes of air pollution. Coal is a dusty material that can create plumes of fine particles that can travel far and be inhaled by humans. Coal dust is a carcinogen that can cause diseases ranging from chronic breathing-disorders to lung cancer.
While coal mining may happen in remote and sparsely populated areas, its transport involves passing coal dust on to densely populated villages and cities. Passengers travelling by train on the Delhi-Kolkata route would be familiar with the long waits near Mughalsarai (now named after Pandit Deen Dayal Upadhyaya) station, which is an important junction for coal transport from eastern India’s coal mines. Other than rail, coal is transported by trucks on highways and village roads, bringing it even closer to people.
No wonder, then, that coal transport has been a subject of conflicts across India. Last month, state-run NTPC Ltd finally commissioned a conveyor belt—which it claims is Asia’s longest at 21 km—near its coal mines in northern Jharkhand. For years, the transport of coal by road had led to complaints of air pollution, leading to a National Green Tribunal case. In 2021, the tribunal had to order the company to finish building its conveyor belt. In one of the protests in 2020, villagers blocked the coal transportation route for almost a month, leading to a dangerous buildup of coal mounds at the mine.
Last month, several people from Adivasi communities in Odisha were arrested for protesting against the construction of a railway line that would carry coal from Adani’s Dhamra port to its power plant in Jharkhand. This is likely to be coal from Adani’s Carmichael coal mine in Australia.
The #SaveMollem movement in Goa concerns railway, highway and transmission line projects cutting through dense forests of the Western Ghats. The first two projects would help transport coal from JSW and Adani’s terminals at Mormugao port to the steelmaking belt in neighbouring districts of Karnataka. (The government claims that the road and railway line will carry tourists too, while the companies deny any role in these projects and say they can do without them.) At the port terminals, even basic measures like building sheds to cover coal handling operations and placing tarpaulin covers on railway rakes have not been implemented.
For all the risks from inhaling coal, India’s famously stringent environmental regulations fall apart when it comes to coal transport. The air and water laws simply do not recognize dust rising from a truck or train as a possible source of pollution. Railway projects are fully exempt from carrying out environmental impact assessments and seeking environment clearances. New highway projects are not exempt, but widening of an existing highway—as in Goa—is exempt if the project covers less than 100 km. Protesters in Goa have for long argued that the government should assess the coal import proposals in their entirety—meaning instead of just looking at the impact of coal import at the Mormugao port, they should also assess the impact of all transport routes leading out of the port. There are provisions in the EIA Notification, 2006, that can make this happen. But they have never been implemented.
To its credit, the environment ministry and its panel to assess coal mining have shown greater awareness of the dangers posed by coal transport over the years. Clearance letters to coal mines have placed mandatory conditions for the coal to be transported via railway sidings or conveyor belts, instead of through village roads. So far, these conditions have been treated as footnotes. To avoid the additional costs, coal miners such as the state-run Coal India have often delayed or avoided implementing them with full knowledge of the environment ministry, as facts emerging from an ongoing NGT case on coal mines in northern Jharkhand show.