Korba district in Chhattisgarh has 13 operational mines. Four more mines are in the pipeline. Of the operational ones, as many as 10 are loss-making, and just three are profitable — Gevra, Kusmunda and Dipka — producing 95 per cent of the coal.
It is a quintessential example of an economy that will need to immediately think of what to do when India starts to ‘phase down’ coal as promised at the annual global climate change conference (COP26) last year.
Coal, part of the fossil fuel basket, is the largest contributor towards emissions and hence planned to be phased down as part of climate action to restrict emissions so that the global temperature rise is restricted to 1.5-degree Celsius compared to the pre-industrial temperatures.
A latest study has found that Korba’s coal-centric economy has stymied the growth of other economic sectors, including agriculture, forestry, manufacturing, and services even as the poor socio-economic status and high dependence on the coal economy make it highly vulnerable to the unplanned closure of mines and industries, leading to severe socio-economic consequences.
Keeping in mind that India’s biggest coal and power districts will face energy transition challenges much earlier than anticipated — it is predicted that Korba will reach its peak in 2025 — the economic restructuring and development intervention will be essential, the latest study by International Forum for Environment Sustainability and Technology (iFOREST) has pointed out.
‘Korba: Planning a Just Transition for India’s Biggest Coal and Power District’ was launched earlier this week.
“Our study of Korba in Chhattisgarh essentially shows just transition in India is about re-development of the coal regions. Major policy and legal reforms in land, labour, and finance will be required to enable a smooth just transition. We need to develop a strategic roadmap for this and secure necessary finances to support it, both domestically and through international cooperation,” Chandra Bhushan of iForest said.
Very clear why Bhushan says so. As mentioned in the report, with declining coal production, for the mining companies (here, South-Eastern Coalfields Limited (SECL)) shutting down all eight unprofitable mines in Korba district in the next few years is a win-win situation as the resources saved can be diverted to start a just transition in Korba.
Despite having coal mines and multiple power plants and other industries such as Balco Plant, the district is a Schedule V district with over 40 per cent tribal population and declared ‘Aspirational District’ with 41 per cent people living below the poverty line and over 32 per cent of the district’s population being ‘multidimensionally poor’ with limited access to healthcare, education, and basic amenities.
The numbers are alarming considering the fact that Korba produces over 16 per cent of India’s coal and is also an electricity hub, with 6,428 MW of thermal power capacity. Clearly, the coal-based economy did not do justice to the poorest of the poor and that makes the task of transition harder in view of the human resources.
The study points out that Korba has an aging formal workforce at least 70 per cent of SECL and National Thermal Power Corporation (NTPC) workers are 40-60 years of age.
“Their retirement can be synchronized with plant and mine closure, making the transition of the formal workers less of a challenge. The biggest challenge is the re-employment of informal workers, who constitute over 60 per cent of the workforce in the coal industry. They will require job support and reskilling. Skilling for the new green economy is another challenge,” the report mentions.
Speaking at the launch of the study report, Secretary, Coal Ministry, Anil Kumar Jain, had said, “A place-based approach is the answer to ensuring a just transition as districts have different issues. A strategic approach will be needed as there is a big human aspect involved in the energy transition.”
He also suggested re-purposing mining land can be a key opportunity.
The CEO of NITI Aayog, Amitabh Kant, welcomed the idea of the report and said, this can become the template in terms of impact on jobs and livelihood, revenue and other social sector investments the energy shift will have consequences for coal dependent district and states’ just transitional result as a concept around the world to ensure that cold dependent towns of regions do not suffer.”
“I entirely agree that a strategic plan needs to be developed in the sector to prevent closures of mine and socio-economic disruptions and the policy should include components of cold phase out strategy at the national state level coal-based power phase out plan,” he said.
“Just transition is not just about climate change action; it is an opportunity to reverse the resource curse in the coal districts. The next 10 to 20 years will be crucial for Korba to plan and implement a just transition. We need to have the right policies and governance mechanisms to ensure that this opportunity to build a new inclusive economy is realized,” said Srestha Banerjee, Director, Just Transition, iFOREST.