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Exclusive: Indian government officials propose break up of Coal India - sources

Reuters  |  NEW DELHI 

By Neha Dasgupta and Krishna N. Das

(Reuters) - Senior Indian officials tasked by Prime Minister with reviewing energy security are recommending the of the country's monopoly, Ltd, within a year.

Attempts to the world's biggest miner would be met by strong resistance from powerful unions representing the company's employees of more than 350,000. The backed down from a similar proposal in the face of union protests in 2014.

Around 70 percent of India's power generation is based. The country is the world's third-largest producer and its third-biggest importer of coal, which the wants to change by boosting local production.

In a presentation seen by Reuters, officials recommend that - with a stock market valuation of $28 billion - should be broken into seven companies, which they say would make it more competitive and efficient.

The proposal, dated Nov 30, is expected to be presented to soon, three officials with direct knowledge of the situation said. They declined to be identified because the information has not been publicly released.

Calls to a spokesman went unanswered.

A source close to power and minister, Piyush Goyal, said the ministry would review its stand on depending on what the prime minister says.

is the country's second-biggest employer, but critics say it is bloated and inefficient. Its output-per-man shift is estimated at one-eighth of Peabody Energy, the world's largest private producer, filed for bankruptcy protection this year.

Under Modi's though, production has risen sharply as environmental and other clearances to develop mines have been fast-tracked. The company is also spending billions of dollars on buying modern machinery to raise productivity.

The wants to increase production of to 1 billion tonnes a year by 2020 from around 539 million tonnes in the fiscal year that ended in March. It wants as a whole to produce 1.5 billion tonnes a year by 2020.

was exploring a breakup of before taking office, reported in 2014, but the put the idea on the back burner following protests by unions. (http://reut.rs/2gXYD5L)

Unions fear restructuring would almost certainly lead to job cuts and work being outsourced to private companies, so are likely to protest against a

"What happens is that once a big company is broken down, it is easier to control the smaller ones," said D.D. Ramanandan of the All Workers' Federation, which he said represents more than 100,000 workers of the company. "But if it happens, we will oppose it. We will oppose it through all ways possible, including strike."

ENERGY SECURITY

In late October, set 10 groups of senior bureaucrats to "undertake a critical review" of work in a number of areas, including energy, transport and agriculture.

The proposal to comes from one of these groups - nine top bureaucrats, including ones from the ministries of coal, power, oil and mines. They were asked to come with policy proposals to promote energy security and the environment.

Under Modi, India's production growth rate has nearly doubled, marking one of the administration's biggest successes. Fuel shortages for power plants have turned into oversupply.

Restructuring is likely to be harder, but is crucial to the government's ambition to sell 10 percent of the company to raise funds for further growth and investment. The owns just under 80 percent of the company.

wants to spend billions of dollars in the next few years to buy equipment and modernise mines. Miners still commonly use shovels and picks to dig for underground.

The company also plans to stop filling most vacancies arising from retirements over the next three years, and outsource more mining to private companies.

unit Mahanadi Coalfields pioneered outsourcing of mining work a few years ago and is now the company's biggest producer and fastest-growing unit. Contractors carry out about 90 percent of the unit's mining.

is a holding company with seven producing units and a planning and consultancy firm. The producing units have their own administrative set-led by a chairman, so breaking them to run as individual companies may not be difficult, analysts said.

(Reporting by Neha Dasgupta and Krishna N. Das; Editing by Neil Fullick)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

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Exclusive: Indian government officials propose break up of Coal India - sources

NEW DELHI (Reuters) - Senior Indian government officials tasked by Prime Minister Narendra Modi with reviewing energy security are recommending the break up of the country's coal monopoly, Coal India Ltd, within a year.

By Neha Dasgupta and Krishna N. Das

(Reuters) - Senior Indian officials tasked by Prime Minister with reviewing energy security are recommending the of the country's monopoly, Ltd, within a year.

Attempts to the world's biggest miner would be met by strong resistance from powerful unions representing the company's employees of more than 350,000. The backed down from a similar proposal in the face of union protests in 2014.

Around 70 percent of India's power generation is based. The country is the world's third-largest producer and its third-biggest importer of coal, which the wants to change by boosting local production.

In a presentation seen by Reuters, officials recommend that - with a stock market valuation of $28 billion - should be broken into seven companies, which they say would make it more competitive and efficient.

The proposal, dated Nov 30, is expected to be presented to soon, three officials with direct knowledge of the situation said. They declined to be identified because the information has not been publicly released.

Calls to a spokesman went unanswered.

A source close to power and minister, Piyush Goyal, said the ministry would review its stand on depending on what the prime minister says.

is the country's second-biggest employer, but critics say it is bloated and inefficient. Its output-per-man shift is estimated at one-eighth of Peabody Energy, the world's largest private producer, filed for bankruptcy protection this year.

Under Modi's though, production has risen sharply as environmental and other clearances to develop mines have been fast-tracked. The company is also spending billions of dollars on buying modern machinery to raise productivity.

The wants to increase production of to 1 billion tonnes a year by 2020 from around 539 million tonnes in the fiscal year that ended in March. It wants as a whole to produce 1.5 billion tonnes a year by 2020.

was exploring a breakup of before taking office, reported in 2014, but the put the idea on the back burner following protests by unions. (http://reut.rs/2gXYD5L)

Unions fear restructuring would almost certainly lead to job cuts and work being outsourced to private companies, so are likely to protest against a

"What happens is that once a big company is broken down, it is easier to control the smaller ones," said D.D. Ramanandan of the All Workers' Federation, which he said represents more than 100,000 workers of the company. "But if it happens, we will oppose it. We will oppose it through all ways possible, including strike."

ENERGY SECURITY

In late October, set 10 groups of senior bureaucrats to "undertake a critical review" of work in a number of areas, including energy, transport and agriculture.

The proposal to comes from one of these groups - nine top bureaucrats, including ones from the ministries of coal, power, oil and mines. They were asked to come with policy proposals to promote energy security and the environment.

Under Modi, India's production growth rate has nearly doubled, marking one of the administration's biggest successes. Fuel shortages for power plants have turned into oversupply.

Restructuring is likely to be harder, but is crucial to the government's ambition to sell 10 percent of the company to raise funds for further growth and investment. The owns just under 80 percent of the company.

wants to spend billions of dollars in the next few years to buy equipment and modernise mines. Miners still commonly use shovels and picks to dig for underground.

The company also plans to stop filling most vacancies arising from retirements over the next three years, and outsource more mining to private companies.

unit Mahanadi Coalfields pioneered outsourcing of mining work a few years ago and is now the company's biggest producer and fastest-growing unit. Contractors carry out about 90 percent of the unit's mining.

is a holding company with seven producing units and a planning and consultancy firm. The producing units have their own administrative set-led by a chairman, so breaking them to run as individual companies may not be difficult, analysts said.

(Reporting by Neha Dasgupta and Krishna N. Das; Editing by Neil Fullick)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

image
Business Standard
177 22

Exclusive: Indian government officials propose break up of Coal India - sources

By Neha Dasgupta and Krishna N. Das

(Reuters) - Senior Indian officials tasked by Prime Minister with reviewing energy security are recommending the of the country's monopoly, Ltd, within a year.

Attempts to the world's biggest miner would be met by strong resistance from powerful unions representing the company's employees of more than 350,000. The backed down from a similar proposal in the face of union protests in 2014.

Around 70 percent of India's power generation is based. The country is the world's third-largest producer and its third-biggest importer of coal, which the wants to change by boosting local production.

In a presentation seen by Reuters, officials recommend that - with a stock market valuation of $28 billion - should be broken into seven companies, which they say would make it more competitive and efficient.

The proposal, dated Nov 30, is expected to be presented to soon, three officials with direct knowledge of the situation said. They declined to be identified because the information has not been publicly released.

Calls to a spokesman went unanswered.

A source close to power and minister, Piyush Goyal, said the ministry would review its stand on depending on what the prime minister says.

is the country's second-biggest employer, but critics say it is bloated and inefficient. Its output-per-man shift is estimated at one-eighth of Peabody Energy, the world's largest private producer, filed for bankruptcy protection this year.

Under Modi's though, production has risen sharply as environmental and other clearances to develop mines have been fast-tracked. The company is also spending billions of dollars on buying modern machinery to raise productivity.

The wants to increase production of to 1 billion tonnes a year by 2020 from around 539 million tonnes in the fiscal year that ended in March. It wants as a whole to produce 1.5 billion tonnes a year by 2020.

was exploring a breakup of before taking office, reported in 2014, but the put the idea on the back burner following protests by unions. (http://reut.rs/2gXYD5L)

Unions fear restructuring would almost certainly lead to job cuts and work being outsourced to private companies, so are likely to protest against a

"What happens is that once a big company is broken down, it is easier to control the smaller ones," said D.D. Ramanandan of the All Workers' Federation, which he said represents more than 100,000 workers of the company. "But if it happens, we will oppose it. We will oppose it through all ways possible, including strike."

ENERGY SECURITY

In late October, set 10 groups of senior bureaucrats to "undertake a critical review" of work in a number of areas, including energy, transport and agriculture.

The proposal to comes from one of these groups - nine top bureaucrats, including ones from the ministries of coal, power, oil and mines. They were asked to come with policy proposals to promote energy security and the environment.

Under Modi, India's production growth rate has nearly doubled, marking one of the administration's biggest successes. Fuel shortages for power plants have turned into oversupply.

Restructuring is likely to be harder, but is crucial to the government's ambition to sell 10 percent of the company to raise funds for further growth and investment. The owns just under 80 percent of the company.

wants to spend billions of dollars in the next few years to buy equipment and modernise mines. Miners still commonly use shovels and picks to dig for underground.

The company also plans to stop filling most vacancies arising from retirements over the next three years, and outsource more mining to private companies.

unit Mahanadi Coalfields pioneered outsourcing of mining work a few years ago and is now the company's biggest producer and fastest-growing unit. Contractors carry out about 90 percent of the unit's mining.

is a holding company with seven producing units and a planning and consultancy firm. The producing units have their own administrative set-led by a chairman, so breaking them to run as individual companies may not be difficult, analysts said.

(Reporting by Neha Dasgupta and Krishna N. Das; Editing by Neil Fullick)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

image
Business Standard
177 22