The NDA government’s recent decision to privatise coal mines has evoked widespread protests across Singareni Collieries in Telangana, one of the major coal producing regions in the country.
Significantly, the ruling Telangana Rashtra Samithi (TRS) is taking the lead in organising protests. Chief minister K Chandrasekhar Rao’s daughter and former MP K Kavitha is the honorary president of the Telangana Boggu Gani Karmika Sangham (TBGKS), the largest trade union body representing coal mine workers.
In response to the the TRS-controlled union’s call, the miners held protests across the state, while burning effigies of the central government, on Friday (June 26). They are also planning to observe a 24-hour strike on July 2.
“The Centre’s decision to privatise coal mines goes against the interests of the public undertakings. We will oppose it tooth and nail,” said Kavitha, who represented Nizamabad Lok Sabha constituency in the past. She was defeated by the BJP candidate in the 2019 elections.
Lifeline of Telangana
After Information Technology and Pharmaceutical industry, which are largely confined to Hyderabad, coal mining is a major activity in Telangana. “It is our lifeline,” says Vinod Kumar, former MP from Karimnagar which is part of the coal belt area.
The state-owned Singareni Collieries Company Limited (SCCL), which currently operates 48 mines spread across four Telangana districts, accounts for 10 per cent of the country’s total coal production.
Nearly 50,000 workers are engaged in coal mining operations, located across a 350 km stretch of the Pranahitha-Godavari Valley. According to the SCCL website, Telangana has proven coal reserves of 8,791 million tonnes.
“Privatisation of coal mining is an emotive issue in this part of the state. Any hint of handing over Singareni Collieries to private sector is bound to evoke strong sentiments here,” says senior analyst Ramakrishna Sangem.
“The SCCL is a profit-making PSU. We will not allow it to be privatise at any cost,” asserted Kavitha.
At the height of the Naxalite movement in the combined Andhra Pradesh, the Singareni Karmika Samakhya (Sikasa), an influential trade union body, was said to be the frontal organisation of the outlawed People’s War Group (PWG).
The revival of the Telangana statehood movement, spearheaded by the TRS, coincided with the erosion of the support base for the Naxalite outfit. Since the formation of the Telangana state in 2014, the TRS has consolidated its hold on the mine workers and emerged as a dominant player in the coal belt.
Apart from TBGKS, all other national trade unions of Singareni Collieries have announced a three-day strike from July 2 to 4 to protest against the privatisation plan recently unveiled by Prime Minister Narendra Modi.
Representatives of the All India Trade Union Congress, Indian National Trade Union Congress, Bharatiya Mazdoor Sangh, Hindustan Mazdoor Sangh, the Confederation of Indian Trade Unions, who had a meeting in Godavarikhani last week gave a notice of the upcoming strike to the management.
They demanded that the Centre withdraw its proposal to privatise coal mines and e-auction of 50 blocks of coal mines in the country.
In September last year, five federations representing over half-a-million workers of the Coal India Limited (CIL) and Singareni Collieries trade unions had struck for a day in protest against the Centre’s decision to allow 100 per cent Foreign Direct Investment (FDI) in coal mining.
While launching the auction of 41 coal blocks that have a capacity to produce 225 million tonnes of coal per year, Modi recently called for making India self-reliant in energy by reducing imports. Despite having the world’s fourth-largest coal reserves and being the second-largest producer, India is the second-largest importer of coal.
“India will turn this COVID-19 crisis into an opportunity. The country will reduce its dependence on imports. To make India self-reliant in the energy sector, a major step is being taken today,” the Prime Minister had said on June 18 while speaking at the launch of auctioning coal mines for commercial mining.
The roll-out of commercial coal mining is part of the series of announcements made by the Centre under the Atmanirbhar Bharat Abhiyan. It is expected to boost private sector participation which will, in turn, lead to higher production and enhance competition.
The latest reforms move by the Centre will effectively end state-owned Coal India’s monopoly over mining and selling of coal.
Commercial mining allows the private sector to mine coal commercially without placing any end-use restrictions. The private firms have the option of either gasification of the coal or exporting it.
They can also use it in their own end-use plants or sell them in the markets. The complete freedom to decide on sale, pricing, and captive utilisation is expected to attract many private sector firms to participate in the auction process.
The government is hopeful of over ₹33,000 crore of capital investments over the next five to seven years in the sector.
With 100 per cent foreign direct investment allowed in the coal sector, global companies can also participate in the auctions. It is expected that these steps will generate employment and reduce India’s import bill.
The government has done away with all eligibility criteria, allowing even firms with no prior coal mining experience to participate in the auction. The firms will only be required to make an upfront payment.
The revenue sharing will be on an ad valorem (the value of the transaction) basis and not on the basis of a fixed amount.
The present bidding terms also allow other minerals to be extracted from these blocks.
Further, the coal ministry will also help the private sector in getting statutory approvals like environment and other approvals.