In an assessment conducted by the Nagaland government’s Directorate of Geology and Mining, it was discovered that coal extracted by private miners in the state is being sold to “nearby brick kilns and tea gardens at significantly low rates.” This was reported by Ayaskant Das in his article “Rat Hole Mining: Tragic Accident Exposes Dark Side of Nagaland’s Coal Sector” published by newsclick.in on 31 January, 2024.
A critical audit report finalized in May 2023 by the Government Accounting Standards Advisory Board (GASAB), under the Comptroller and Auditor General (CAG) of India, highlighted several concerning aspects of coal mining governance in the state. According to the report titled “Natural Resource Accounts of Nagaland for the Year 2020-21,” the Directorate of Geology and Mining faced severe criticism for its failure to effectively address illegal mining activities and the resulting revenue losses.
Despite the existence of six coal prospecting licenses and 11 coal mining licenses awarded by the Nagaland government, the audit found significant shortcomings in monitoring and regulation.
During the fiscal year 2020-21, the government collected a nominal royalty of Rs 2.19 crore from coal mining, indicating a modest increase from the previous year’s Rs 0.72 crore. However, the audit revealed that the department lacked comprehensive data on coal production and sales, relying solely on truck counts for transportation monitoring.
The GASAB audit found that the department did not have details of the production and sale of coal for any of the years in the past. There was no mechanism in place to weigh the amount of coal extracted in the state apart from counting the number of trucks used for transportation, even though the royalty amount is always collected in advance from the licensees. No data was found with the directorate pertaining to establishing check gates to thwart illegal transportation of coal.
Moreover, the absence of mineral check gates and mobile check gates for detection and collection of royalties from illegal transporters, as mandated by the Nagaland Coal Policy 2014, further hindered the department’s ability to prevent illegal mining activities effectively. The audit report emphasized the need for setting up infrastructure for monitoring and enforcement to curb illegal mining effectively.
“Similarly, setting up of Coal Depots and installation of Weigh Bridges within the zone of extraction of coal and boundaries of Nagaland to conduct trade and export of coal is required, but no data is available with the Department of Geology & Mining regarding setting up of Coal Depots and Weigh Bridge. Resultantly, the department could not monitor illegal mining effectively,” said the audit report.
Another glaring issue highlighted by the audit was the lack of coordination and cross-verification between different government departments, such as the Geology & Mining and Forest Departments. This absence of a unified approach increased the risk of illegal mining and transportation of coal across state borders, the audit said.
Surprisingly, the audit report also revealed the absence of District Mineral Foundations, which are crucial for utilizing funds collected from mining taxes to benefit communities affected by mining activities.