Monday, September 24, 2012

The Early History Of Coal Mining In India

India's coal reserves come from the Permian-Early Mesozoic continental rift basins situated in eastern India.

Coalgate is making headline news almost every day in India but Vikram Doctor on his blog On My Plate writes about the many shenanigans of early coal mining:

It was an American who first tried to develop systematic coal mining in India. Suetonius Grant Heatly was born in Newport, Rhode Island, but during the American Revolution his family was loyal to the British, and fled to Britain. Heatly joined the East India Company in 1766, possibly because Lord Cornwallis, the Governor-General of India, had earlier headed the losing British forces in America, and was expected to favour the British loyalists of that conflict. Heatly became Collector of Chotanagpur and Palamu (now part of Jharkhand). And it was while travelling here that he noticed local tribal people burning coal fires, Jha notes that the seams are found exposed on the surface in these areas. This was not far from the Damodar river and Grant, along with another East Indian man, John Sumner, realised that coal could be mined and floated down the river to Calcutta.

Grant and Sumner teamed up to get Company permission to mine coal. Yet their first application, in 1770, was rejected. Jha suggests this was because the Company was unsure of its rights of mineral extraction and, in any case, preferred to use its monopoly position to import minerals from Britain and sell them at high prices in India. Also, they were apprehensive about Indians learning how to use these minerals: “They even feared that once the natives acquired the art of smelting metals and the manner of casting them into cannon shot and shells that they would become masters of the latter.”

There were many early attempts in the late 1700's to early 1800's to mine coal but these ventures were never profitable due to hazardous mining conditions, legal disputes over land rights, poor transport and the better quality of imported English coal.  Then later in the 1800's demand reached a point whereby mining Indian coal became economic again. The East India Company backed English entrepreneurs who leased land from local rulers.  There were Indian businessman too. Among them who made a fortune in coal was Dwarkanath Tagore, grandfather of one of the most famous Indian poet writers Rabindranath Tagore. 

Tirthankar Roy in his book The East India Company describes the precarious balance the Company had to maintain between monopoly and allowing its agents and other merchants to conduct private trade in competition with the Company. Vikram Doctor's article brings out this aspect of  Company business life quite well along with the ruthless opportunism of these early coal entrepreneurs.

Read more here.


  1. Interesting to know Heatly was an American.