Top coal mines in India struggle to expand as protests slow work

Protests over land sold for mine expansions in one of India’s top coal regions are hindering efforts to boost production and avoid a repeat of last year’s energy crunch.

Residents in the central state of Chhattisgarh, where Coal India Ltd. operates some of Asia’s biggest coal mines, have accused the producer of reneging on offers of employment made under sale agreements. 

Demonstrators have in recent weeks refused to vacate land earmarked for development, or disrupted operations at existing mine sites, according to company officials who asked not to be identified. 

The protests come as high seaborne coal prices have limited India’s imports, contributing to a decline in inventories at power plants as the nation heads into its high-demand summer months. Coal India is already prioritizing deliveries to power generators ahead of other key consumers including aluminum smelters and cement factories.

Locals have been protesting at the Kusmunda coalfields for weeks, while similar actions are also being carried out in the Gevra and Dipka areas, according to the officials. 

Coal India is examining the merits of demands made by the demonstrators, including on employment, the company said in an email. The firm is talking to both the protesters and local government and hopes to soon amicably settle the issue, it said.

“We will fight these expansion plans tooth and nail,” said Deepak Sahu, a local protester whose family sold a part of their land in Gevra and argues Coal India has reneged on its employment commitments. “We are not going to rest until the company accepts our demands.”

The protests threaten to disrupt efforts to boost domestic coal capacity, and last month authorities called off a public hearing on a planned mine expansion citing law and order concerns, according to a letter seen by Bloomberg News.

South Eastern Coalfields Ltd., the subsidiary that runs Coal India’s operations in Chhattisgarh, is aiming to expand output by more than a quarter this fiscal year to 182 million tons, with extensions of key mines in Gevra, Kusmunda and Dipka crucial to achieving that target.

(By Rajesh Kumar Singh)