While the Nagaland State Government struggles with streamlining the coal business, prospectors in the coal-rich belt of Mokokchung district are grappling with a falling price phenomenon. The price slump has slowed exports as miners fail to get a fair price from buyers in Assam.
The slump, which has refused to show any sign of upturn for over a year, has brought work almost to a halt in several mines under Mangkolemba sub-division, particularly those located in sections of the Changkikong, Japukong ranges and the Tzurang river valley.
From Rs. 4000-4500 a ton in 2014, the rates (given to miners) have currently dropped to Rs. 1600-2200. Miners from the area say the dip began around the beginning of 2015 and has not risen since. However, according to a miner, the same (Nagaland) coal was trading at Rs. 6500-7000 a ton in Guwahati during the first week of April 2016. It may be noted that coal from the said locations passes through Mariani, Jorhat and Guwahati enroute other destinations. The rate fixed by the Nagaland government holds no bearing.
Not discounting the downturn in international coal prices, the miners point to local factors that have actually contributed to the slump in business. Government restriction on payload, ‘middlemen’, multiple taxation and increased labour costs have all, in parts, contributed.
Govt restrictions & middlemen
The introduction of a Nagaland State government-authorised weighbridge at Longtho valley (bordering Assam) has upset buyers and contractors from Mariani, say miners. The weighbridge was installed in 2014 to put a check on the maximum cargo weight a truck can carry, for safety as well as revenue reasons. Along with it, a maximum payload of 20 tonnes per truck was enforced.
Earlier, when there was no such restriction, a truck could carry over 30 tonnes, which translated into a good profit margin for both the buyer and the seller (miner, in Nagaland’s case). “Now, with the restriction in place, it has narrowed the profit margin for the buyer, who no longer is willing to pay the pre-2015 rate,” says one miner.
Transporting 60 tonnes would require three trips for a truck, which means that the transporter has to incur additional transport costs, besides paying statutory as well as unsolicited taxes at check-posts.
It, however, has not prevented the more adventurous buyers, as they allegedly bribe their way through carrying well over the 20-ton limit. Rs. 200 is service charge at the weighbridge, plus Rs. 500, if the buyer wants to carry beyond the specified weight limit, it was informed. This, while they continue to buy cheap coal from miners in Nagaland desperate to dispose of the piling up mineral.
Before, according to the miner, a truckload of around 30 tonnes could fetch a seller Rs. 90,000-1,00,000. The buyer from Mariani could double or even triple the amount supplied to bigger buyers based in Guwahati, making good profit even after deducting expenses, inclusive of taxes statutory as well as illegitimate.
Now, the rates offered to miners have been cut by 50 percent.
These factors are influenced by alleged pressures from a lobby exerting control from across the State boundary at Mariani. According to miners, this lobby, dubbed as ‘coal syndicate’ or ‘middlemen’, control the rate chart of coal from the areas mentioned above. It allegedly prevents parties from outside Mariani, big companies included, to make direct deals with miners, while also creating artificial price fluctuations. “This force ensures that any coal that goes out from here has to pass through it.”
“Taxation starts from the mines,” a miner said, adding that a Naga National group charges Rs. 30,000 as annual tax on any active mine. Transporters are charged separately per shipment on the road. Aside from the statutory tax to the nodal government agency, other government agencies at the inter-State checkpost, including the police, have to be monetarily satiated.
Put together, the pressures on individual miners of Nagaland have increased so much so that production has reduced on the one hand. On the other, whatever is mined is sold at unfair rates. These factors need to be studied by the Nagaland State Government while taking up policy initiatives.