By Pratap Chatterjee
LONDON, May 19 1996 (IPS)

The first of a series of loans to expand 25 coal mines in India was approved by the World Bank late Thursday despite major opposition by local groups and international activists.

The Bank’s board of directors voted in favour of a 63 million dollar soft loan for Coal India, the state-owned company which extracts 90 percent of the coal in the country, “to deal more effectively with environmental and social issues.” Also approved last week was a 350 million dollar loan to restructure the power supply system in the eastern coastal state of Orissa.

“In general there is no getting away from coal being mined in India and used for power generation, given that coal, with reserves of about 250 years, is the least cost source of energy for most uses in the country,” says Paul Mitchell, a spokesman for the South Asia department of the Bank.

“So the question is to use the resource most efficiently and with the least negative impacts,” he adds.

Activists disagree. They say that the 63 million dollar loan is intended to pave the way for a 500 million dollar loan, to be approved later this year or the next, to massively expand 25 mines across India to increase coal extraction from 78.6 million to 104.6 million tons per year, that will have very negative effects on local people.

“The loss of natural resources, loss of occupation for thousands of fishermen and farmers, the miseries due to health hazards and displacement far outweigh the development that coal- fired power in Orissa is ushering in,” said Sisir Tripathy, coordinator of the District Action Group (DAG), a group of 21 non- governmental organisations in the heavily industrialised Talcher- Angul region of the state.

Daphne Wysham, from the Institute for Policy Studies in Washington DC, says that the Orissa loans will help turn the state into one of the world’s most polluted regions.

“Although the Bank is directly financing the least controversial aspects of these loans — power restructuring and distribution — it is indirectly facilitating the continued poisoning and impoverishment of Orissa’s poorest people, turning the state into a global sacrifice zone,” she says.

Peter Bosshard, from the Berne Declaration in Zurich, Switzerland, says that Operations Research Group (ORG), one of Coal India’s own consultants, pointed out last year that such “mining activities have shattered the equation worked out by man and nature for centuries. Communities which survived on subsistence economy have been pushed to a life of perpetual migration, hunger and deprivation.”

For example Bosshard says in 1977 the World Bank lent 850 million dollars for the construction of a major coal power plant, an open-pit mine, and transmission lines in the Singrauli region in central India.

Altogether over 150,000 people have been displaced in the last 30 years, many five times over, to make way for the dam, the power plants and the coal mines. Today they live in abject poverty with no electricity or running water for themselves.

Mitchell disagrees. “The project before the Board on Thursday and the further Coal Sector Rehabilitation Project and previous Bank lending have all tended to support the efficient use of energy in the country. In terms of the environment this project should have an extremely positive impact,” he wrote to IPS earlier this week.

“With regard to land management – revegation of degraded land will help generate fuel, timber and other forest products which will help tribals reduce the pressure on existing forest lands”

“Through proper land reclamation and adequate plantation the project will also reduce noise and air pollution between active mining and settlements. In terms of water management the emphasis on recycling and reuse of industrial water and will reduce the water requirements from natural sources making more water available to rural and tribal areas,” he added.

Wysham says that this masks the fact that the Orissa loans will result in the displacement of over 7,400 people to make way for coal mine expansion projects and the displacement of an additional 35,000 people in Orissa to make way for new coal-power consuming steel mills, and bauxite and chromite mines.

Already, she says, industrial effluents have rendered stretches of the Brahmani River in Orissa lifeless and unfit for human consumption. Tribal people, fishing villages, cattle, thousands of migratory birds, and five species of endangered sea turtles are at particular risk.

In addition, Wysham says that the expansion of coal-fired power from 2,400 to over 19,000 megawatts over the next ten years will produce at least four percent of the world’s increase in man-made, global warming carbon emissions over this period from Orissa alone.

Mitchell says that the global environmental impacts of coal mining are minor. “The main impact on the global environment is through the release of coal bed methane gas but coal mining is a relatively small contributor of this.”

“In fact it emits less methane to the atmosphere than does, wet rice agriculture, livestock and solid wastes. All methane gas emissions come from underground mines. The proposed project only deal with open cast mines so there will only be local environmental effects to be mitigated and no global impacts,” he added.

Wyshan says that this is a very narrow view of matters because even if coal mining itself contributes little to global warming, the use of the coal has a major impact.

“Orissa’s contribution to climate change is much more significant when one looks at where most of this energy is going. About 33 percent of all power is consumed by two aluminum smelters, NALCO and Indalco, both of which burn coal from World Bank-financed mines. Both are slated for big expansions,” she says.

“By the year 2005, Orissa’s emissions of 891 tons of tetrafluoromethane and 101 tons of hexafluoroethane, a byproduct of producing 636,000 tons of primary aluminum, will result in a total of 8 million tons of carbon dioxide equivalent being emitted into the Earth’s atmosphere–and staying there for over 10,000 years.”

Nor are the local impacts of these development projects by any means small. In 1990, scientists from G.M. College of Sambalpur found an astonishing 67 percent of men and 64 percent of women near a Bank-financed coal-fired power plant in Orissa suffered from fluorosis; most severely impacted were young people between the ages of 12 and 19. Cattle populations have dropped precipitously in the area due to the bone-weakening disease.

To add insult to injury, the tribal Ganjam District, Orissa, where infant mortality rates are already among the highest in the world, is also the proposed site of a biggest steel mill in India fitted with its own sizeable coal-fired power plant, to be financed by the International Finance Corporation (IFC), the World Bank’s private sector affiliate.

The activists argue that the coal-fired power plants will provide little to peole in the rural areas who consume a mere three percent of the national electricity output, relying on traditional sources of power like cowdung and fuelwood.

“In fact, by encouraging the expansion of coal-fired power, the Bank is actually making things worse off for most Indians because biomass resources are negatively impacted by coal burning,” says Wysham.

In other states like Bihar the complaints are similar. In addition the activists say that the Bank has not bothered to talk to the local groups that have been studying these matters for years.

Bosshard says that he has received letters from the Jharkhand Janadhikar Manch (JJM) from Bihar, who prepared two detailed, state-of-the-art critiques of Coal India’s resettlement and rehabiliation policy, who were never consulted by the Bank.

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