Adani Group allegedly made profits at the expense of air quality and public health by selling low-quality coal as cleaner fuel to the Tamil Nadu state power utility, a Financial Times (FT) report says.
When Did The Case Come To Light?
According to the report, on January 9, 2014, the bulk carrier MV Kalliopi L docked at Ennore port in Chennai after a fourteen-day voyage from Indonesia. It carried 69,925 metric tons of coal destined for the state’s power company.
However, the paperwork for the coal on board the ship took a more circuitous route, passing though the British Virgin Islands and Singapore. During this process, the price of this shipment on paper more than tripled and the quality of the coal also inexplicably changed from low-grade steam coal to the clean, high-quality version sought by power companies.
What Else The Report Says?
Documents obtained by The Indian Organized Crime and Corruption Reporting Project(OCCRP) and shared with the Financial Times reveal that at least 24 coal shipments that landed on the Tamil Nadu coast between January and October 2014 were originally priced as low-quality coal but ultimately sold by Adani to the local state power company for triple the cost.
OCCRP is a global network of investigative journalists with staff on six continents. It was founded in 2006 and specializes in organized crime and corruption.
Did The Adani Group Double The Prices?
Adani Group reportedly sourced the coal in Indonesia from a mining group known for its low-calorie output, at prices consistent with low-grade fuel. It delivered the coal to Tamil Nadu’s state owned power company for power generation, fulfilling a contract that specified expensive high-quality fuel. The FT has also matched documentation for a further 22 shipments in 2014 involving the same parties that indicates a pattern of grade inflation in the supply of 1.5mn tonnes of coal.
The Environmental Dimension
More than 2 million people are killed in India each year by outdoor air pollution, according to a 2022 study in The Lancet, while other studies found significant increases in child mortality for hundreds of miles around coal-fired power plants.
Coal-fired power plants, which supply about three-quarters of India's electricity, accounted for roughly 15% of the country's man-made emissions of fine particulate matter, 30% of nitrogen oxide and 50% of sulphur dioxide. Lower the quality of coal, higher the air pollution from its burning.
The Adani Group seeks to rebrand itself into a big renewable energy player, including by building one of the world's largest wind and solar parks in Khavda, near the Pakistan border. The group, which denies wrongdoing, still remains one of India's biggest importers of coal. India's Directorate of Revenue Intelligence (DRI), the finance ministry's investigative unit that police's economic crime, also opened a probe into coal prices and its manipulation in 2016.
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