India faces a dire situation in coal. Coal India cannot raise output from the mines it has in India. It was refused permission to open mines in forests and tribal areas by the ministry of environment. The impression that Jairam Ramesh was being obstructive led to his transfer to rural development. But the ministry, now under Jayanthi Natarajan, continues to be law-abiding and obdurate. The approval given to private ultra mega power projects was accompanied by allocation of reserves to them for captive coal mines. That brought the power ministry into the fray. The comptroller and auditor general has criticized earlier allocation of coal blocks at less than market prices.
In the background lurks the Supreme Court, which always champions Good causes such as protection of the environment. In the course of the recent case on spectrum allocation, however, it developed a taste for auctions; when coal allocations end up in the court, it may force auction of mines decades after they were allocated and exploited. If its earlier taste for good environment comes to the fore again, it may even cancel the allocations. The official structures are perfectly designed to obstruct decisions and send them up to a higher authority. That should have pushed the conflicts to the cabinet. But conflicts lead to shouting, which the prime minister deprecates. So he has relegated coal allocation to a group of ministers. It has seen much heated argument. But the best efforts of Ms Natarajan, the environment minister, have been to no avail; she is outnumbered by male, development-minded ministers, who have pushed through one excavator after another into pristine areas.
These games may work amongst politicians; private entrepreneurs find them too difficult. So they long ago gave up on Indian coal and started going abroad. All major steelmakers have lined up supplies of coking coal from Australia; NRE Coke has made major investments there. Coal India too should, but it cannot. Coal India’s ministerial patrons tried to secure domestic reserves for it by political means. But clout is not enough; India’s hunger for coal cannot be satisfied by hunting in the forests of Jharkhand. Coal India also needs to spread out abroad. But its political masters refused to honour a judgment given by the international court of arbitration against Coal India and in favour of Australia’s White Industries. Thanks to this assertion of national immunity from international justice, Coal India cannot invest in coal in Australia, or even import it for its Indian customers. Meanwhile, India’s sovereign government has ordered it to satisfy the coal requirements of state electricity boards forthwith. Many Indians, when they were children, heard the story of a king called Canute, who ordered the sea to retreat. It came and wet his feet instead. Coal India is about to make a Knut of the government.