Coal India workers' strike may cost Rs 500 cr; 3.5 mt sales to be affected

Coal India's 2.3 lakh workers to participate in the 2-day strike

Coal India is expected to lose at least 3.6 million tonne (mt) of production and an equal amount of coal sales, estimated around Rs 500 crore, after four central trade unions (CTUs) decided to join the nationwide two-day strike beginning on January 8. 

Four trade unions — Congress-backed Indian National Trade Union Congress (INTUC), CPI-backed All India Trade Union Congress, CPI(M)-backed Centre of Indian Trade Unions and Forward Bloc-supported Hind Mazdoor Sabha — have given a call to stop mining activities in the company, on the lines of the nationwide strike called in protest against several government policies. 

The BJP-led Bharatiya Mazdoor Sangh, the second-largest trade union in Coal India, will abstain from the strike. 

This comes in the wake of at least 10 power plants in the country facing severe coal shortage at the very beginning of the new calendar year and Coal India boosting its production to meet the demand from power companies. The company even liquidated its stocks in the process. 

Usually, despite any production levels, the state-owned miner keeps at least 30 mt of coal stock with itself for various exigencies. However, in the wake of higher demand from the power plants, Coal India recently stepped up its despatches and risked its pit-head stock falling to sub-25 mt levels. 

On whether the proposed strike will aggravate the coal availability situation in the country, S Q Zama, secretary general of the National Mine Workers’ Federation, a worker’s union in Coal India registered under the INTUC, said, “While it is true that coal supplies to power generators will be hit, the strike is a last resort. We have time and again raised our issues but it had fallen on deaf ears.” 

A report from India Ratings and Research suggested that in November last year, while all-India energy requirements increased 4.9 per cent, the available energy increased by 5.2 per cent. “Thermal generation in November 2018 was supported by an increase in monthly coal production by Coal India to 52.1 mt. Coal inventory at power stations improved 26.2 per cent driven by higher production and lower seasonal electricity demand,” the report said. 

In the same month, short-term power prices declined to Rs 3.59/kWh compared to the last two months but increased marginally from Rs 3.55/kWh in November 2017. 

“The decline in prices was on account of the ongoing winter season, leading to a lower electricity demand,” the report added. 

Furthermore, Coal India’s sales volume had also declined by 1.2 per cent in December last year at 52.77 mt, backed by a 0.9 per cent decline in production at 54.13 mt. 

A senior Coal India official said while the Maharatna company is striving to maintain its production and despatch levels, workers’ attendance may be low as the major trade unions have joined hands. 

“We have tried to discuss with the trade unions to address their issues and arrive at a compromise, but the strike on these dates is backed by a call for a national strike,” the official said.

The likely impact

• 3.6 mt Production to be hit 

• 3.5 mt sales to be affected 

• Rs 500 crore total estimated loss 

• 0.23 million workers to participate in the 2-day strike