Plans to expand coal factory in South India suspended by environmental court

UDUPI, India—Villagers in South India earned a major victory against a planned coal production plant, as the country’s environmental court suspended a permit allowing for the plant’s expansion, March 14. The ruling prevents operators of the coal plant from moving forward with its plans to expand its operations due to “serious issues raised.”

            The National Green Tribunal ruled Adani plans to expand a coal power station it purchased at Udupi, Karnataka in 2014 will not be allowed to move forward due to its environmental hazards and regulative violations. The imported coal plant was commissioned in 2011 and built by Lanco, an Indian power generation company.

            “We find that the project proponent had been in violation right from the inception,” the environmental court ruling stated. “Genuinely serious issues raised by the villagers and the Applicants had not been given the due attention it observed by all concerned, including the government. The fact that multitudes of disputes and litigations relating to the project had been instituted bears witness to the fact that all was not well.”

            Adani’s coal plant in Udupi was subject to numerous protests and challenges. Activists and local claimed the plant damaged crops, the local water supply and overall public health.

            Those sitting on the National Green Tribunal agreed, looking to a study conducted by a group of scientists in 2012 for support. The study, published by the Indian Institute of Science in Bangalore, found there were “alarming observations in respect of the project area during field investigations,” according to the environmental court’s ruling.

            “It has been observed that mismanagement of the environment was evident from the contamination of water (surface and ground), soil and air apart from the impaired functional aspects of the biotic elements,” the environmental court ruling stated. “This was deduced from the reduced productivity of grains, jasmine flower and horticultural produce, reproductive ability of livestock, poultry animals.

            “The study reveals that there was gross environmental mismanagement which, in our considered opinion, can be reasonably attributed to the casual manner in which the project had been cleared and barely monitored,” the ruling continued.

            Expanding the coal plant south of Udupi and a few miles east of the Arabian Sea coastline would, according to the National Green Tribunal ruling, pose a serious threat to rivers, estuaries, aquatic resources, underground aquifers, crops and human health.

Yellur Village and Karnataka

            Adani sought to expand its coal power plant in Yeller Village, located a short distance off the Arabian Sea, just south of Udupi in Karnataka state. The Deccan Herald, a major news outlet in India, described Yellur as “a tiny village” and “sleepy town” where an ancient Hindu temple calls home.

            India’s Census 2011 website stated Yellur’s population at the beginning of this decade was 5,453.

            Villagers, with the support of other activists, vocally expressed concern over the Udupi coal plant expansion – and the National Green Tribunal ruling appears to have given the small village of Yellur a victory over a large business interest.

            Deforestation and tigers are among the top environmental issues in the southwestern state of Karnataka, where Bengaluru – commonly referred to as India’s Silicon Valley – calls home.

Coal and India

            The environmental court’s ruling was followed by bleak news on the future of coal in India. A high-performing subsidiary of Coal India, the latter of which apparently has a monopoly on the industry, is struggling with labor unrest at its mines. The unrest has resulted in a loss of production, according to news reports.

            Unrest, growing costs and delays in the supply chain are all warning signs of what could be a the start of a downward trend for Coal India’s bottom line, it was recently reported.

            “Coal India’s standing with investors as a ‘dividend play’ could take a beating after the near-monopoly government miner declared interim dividends that feel below Street expectations,” an Economic Times news report, published on March 19, stated.

            The same news report continued Coal India’s dividend payout for 2018-2019 could be at its lowest since 2012-2013. Coal India’s stock has reportedly dropped by 45 percent since August 2015, raising obvious concerns of whether coal in an investable asset.