India’s coal irony

March 25, 2011

INDIA-COALIndia has the world’s fourth largest coal reserves, but trying to access them is like trying to get beer out of a dry town in the midst of a swinging party.

India needs coal. Whether you like the environmentally polluting stuff or not, half of its population doesn’t have electricity. That’s 500 million people who have to cook dinner on open fires, wash clothes by hand and get their entertainment crowded around shared TVs. And if India wants to progress and build homes and factories to improve everyone’s life – it needs more electricity and coal is the cheapest and easiest energy source around.

So it makes sense that India is the world’s fourth largest coal importer, right? Well, here’s the irony: India has coal, oodles of it, not high quality but the kind its power plants can cope with – yet it can’t access much of it.

The root of the problem is the oft applied phrase “land acquisition”. India is heavily populated; there are people everywhere; those people don’t always want to move aside for modernisation, especially if it upsets their arable land, that is their immediate livelihood. Discussions of long-term benefits often fail to resonate, especially when some power-hungry politicians manipulate land disputes to their advantage.

But it’s not just that, at every twist and turn of trying to access coal there are convoluted, hair-pulling roadblocks.

Say it’s graduation day. You’re on your way to big things. It’s time to celebrate. You’ve stocked up on beer, good wine and even some quality liquor. But you’re not prepared for the multitudes who’ve shown up to the party. And you live in what is practically a dry town. So beer runs are made out of town, around the county and beyond, because, guess what? A neighbouring (read: rival) college is also celebrating and so the race is on to get to the alcohol first.

But you’re getting twitchy. It won’t be long before people start to realise you don’t have enough booze to keep the party going. The big, irritating irony is your town has some of the largest beer supplies in the land. But past graduates were so rowdy, they destroyed the local beer shops. Another few classes promised to pay for the beer but never did. Oh, and many of the shops are in areas controlled by a rebellious lot demanding their own town. And even when you find someone willing to sell, their shop is so remote and roadless by the time you get an assembly line together to pass the beer out, dawn breaks and … the party is over.

How long will it be before dawn breaks on India’s growth opportunity? Sure, India can continue to import (if China doesn’t get to supplies first), much to the profit of coal miners and traders around the world, but can India’s own miners, politicians and people come together to enable India to tap its own coal? Will the proposed Mining Act, which mandates that 26 percent of a new mine’s profits must go to the local community, be the key? Most argue 26 percent will be too huge a deterrent for industry, but others say a high remuneration is the only way to unlock the land.

Or, now here’s a radical thought, can India’s bulging brain power be harnessed – with the help of government incentives – to develop sustainable, alternative energy, perhaps likened to quality whisky or wine, while everyone else is on a beer run?

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