China, Russia, India, and Australia responsible for 77% of new mine activity: Report

Jharkhand, Chhattisgarh and Odisha account for 83% of India’s coal mining capacity under development

Around 2.2 billion tonnes per annum (btpa) of new mine projects around the world are under development representing a growth of 30% from current production levels, according to a new report from Global Energy Monitor (GEM). The report revealed that a handful of provinces and states in China, Russia, India and Australia are responsible for 1.7 btpa of new mine activity.

The report titled, ‘Deep Trouble- Tracking global coal mine proposals’ is a first-of-its-kind analysis that surveyed 432 proposed coal projects globally. The analysis pointed out that if these proposed projects continue without unprecedented cutbacks, they could boost supply to over four times the 1.5 degree Celsius-compliant pathway necessary to meet the goal of the Paris climate agreement.

Proposed mine activity can create a significant stranded asset risk 

According to the report, there are 432 new mine developments and expansion projects currently announced or under development worldwide, amounting to 2,277 million tonnes per annum (mtpa) of new capacity. 

Of this a majority (1.6 btpa) of proposed coal mine capacity is in the early stages of planning, the remaining (0.6 btpa) is already under construction, it added. The prospect of a low-carbon transition puts these projects at a risk of up to USD 91 billion in stranded assets.

“If built, these new coal mine projects would produce emissions equivalent to current emissions from the United States. Driving up emissions is the fact that many of these new mines are greenfield proposals that will lock-in more long-term production and unleash new sources of methane emissions,” said Christine Shearer, Program Director for Coal at GEM and co-author of the report.

Moving away from the IEA’s roadmap

Coal producers’ expansion plans are contrary to the IEA’s net-zero roadmap, which requires no new coal mines or coal mine extensions beyond 2021. The plans are also at odds with the UN and leading research organizations, which have found coal production needs to decline 11% each year through 2030 to limit global warming to 1.5°C, the report stated.

“While the IEA has just called for a giant leap toward net-zero emissions, coal producers’ plans to expand capacity 30% by 2030 would be a leap backwards. Demand for coal is plummeting and financing for new coal projects is drying up. New mines and expansions of existing mines will be producing coal for a world in which coal is unviable economically, and untenable for the environment,” said Ryan Driskell Tate, a research analyst at GEM  and lead author of the report.

The analysis also pointed out that if proposed new mines open as intended, the CO2 emissions from combustion will be equivalent to 4,639 Mt a year, a 14% increase over global CO2 emissions in 2020  Additionally, the mines will leak an estimated 13.5 Mt of methane each year, it added.

India amongst top three nations pushing massive expansion

While China leads the world in proposed coal mining capacity, with a total of 609 mtpa of capacity under development, India is not far behind- ranking third in the category.

India’s mining proposals are highly concentrated, with 83% of the nation’s planned capacity located in just three states- Jharkhand, Odisha, and Chhattisgarh. The single largest project in the country, the Siarmal Open Cast mine in Sundergarh, Odisha could produce 50 mtpa at peak capacity, with an operational life of 38 years, making it the second-largest proposed coal mine in the world after Australia’s Carmichael Project .

Currently, India has 363 mtpa capacity in planning and 13 mtpa under construction, the report said. The state-owned enterprise, Coal India Ltd (CIL) accounts for 80% of India’s domestic production. Based on GEM analysis, 66% (250 mtpa) of India’s proposed mine capacity is currently controlled by CIL.

To cut coal imports totalling around 250 Mt in 2019, the government decided to increase its domestic coal production. However, the state-owned enterprises have still fallen short of national targets. 

In June 2020, India for the first time opened public coal blocks for auction to private companies with direct foreign investment. However, from 186 mtpa of productive capacity put up for sale, only one quarter (51 mtpa) was allocated, and none of it to foreign buyers.

Undeterred, the national government announced in March 2021 that it would put an additional coal block up for sale that will take place from June to July.

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