Opencast coal mining and sustainable local livelihoods in Odisha, India

With growing demand for mineral resources and favourable policy towards the mining sector, developing countries have become investment hubs for mineral extraction, which has changed the socioeconomic and ecological scenarios particularly in rural areas. Extractive industries such as coal mining generate negative externalities that bring irreversible changes in the local ecological conditions, which adversely affect the local economy and threatens the sustainability of local livelihood systems. The objective of this paper is to analyse the effects of coal mining on local traditional livelihood systems in the eastern Indian state of Odisha. The study is carried out using household level data collected from four mining villages located in the Ib valley coal field of Odisha. The problem of sustainability of local traditional livelihoods is examined in the light of economic theories of sustainability (e.g. weak and strong sustainability) and sustainable livelihood approach (SLA). The results show that rural households in the mining area experience both positive and negative outcomes from the coal mining activities. The expansion of mines has provided employment to locals directly as well as indirectly, which has helped to increase financial as well as physical capitals. On the other hand, the reduction in the provision of ecosystem services due to adverse effects of coal mining resulted in lower yields in traditional livelihood activities such as forest, agriculture, and animal husbandry. The paper suggests that in order to effectively internalize the externalities arising from coal mining and maintain the sustainability of local livelihood system in Odisha, there is a need to reinvest some part of resource rents in regeneration of natural capital of the region. © 2016, Springer-Verlag Berlin Heidelberg.