Coal India slips on buzz union may go on strike

Coal India fell 0.36% to Rs 355.90 at 14:25 IST on BSE on reports the company's union is planning to go on a strike to oppose the privatisation of commercial coal mining.

Meanwhile, the BSE Sensex was up 100.46 points, or 0.35%, to 28,543.17.

On BSE, so far 1.33 lakh shares were traded in the counter, compared with an average volume of 2.88 lakh shares in the past one quarter.

The stock hit a high of Rs 358.40 and a low of Rs 351.20 so far during the day. The stock hit a record high of Rs 423.85 on 11 June 2014. The stock hit a 52-week low of Rs 240.50 on 26 February 2014.

The stock had underperformed the market over the past one month till 2 December 2014, falling 0.86% compared with 2.07% rise in the Sensex. The scrip had also underperformed the market in past one quarter, falling 5% as against Sensex's 5.27% rise.

The large-cap company has an equity capital of Rs 6316.36 crore. Face value per share is Rs 10.

According to reports, central trade unions, that represent 90% of workforce at state-run Coal India, have threatened to go on an indefinite strike if the government opens up the sector, allowing private miners to sell coal commercially in the market. This move follows a bill on coal block auctions being passed by the Cabinet and being readied to be placed in the Parliament.

According to reports, the Cabinet on Tuesday, 2 December 2014, cleared a bill on coal block auctions to replace an ordinance that was promulgated to begin auction of coal mines that were cancelled by the Supreme Court. The bill to replace the Coal Mines (Special Provisions) Ordinance, 2014 is likely to be brought before the Parliament during the ongoing winter session, reports added.

The union plans to protest around 12-16 December 2014, the date of going on a strike will be decided once the coal ordinance is placed in the Parliament, reports suggested.

Workers' unions have jointly opposed the government's proposal to allow private players to mine coal and sell it in the open market, a right till now reserved with the state-owned Coal India.

SQ Zama, secretary general of Indian National Mineworkers' Federation was quoted by media as saying that if the government allows commercial coal mining, there will be a drastic fall in income of workers.

The government has reportedly said that the 74 coal mines, which government plans to auction to specific end-users in the first phase of bidding on 11 February 2015, will not require any green clearances.

It may be recalled that the Supreme Court had in September cancelled allocation of 204 coal blocks, including 42 operational mines and another 32 ready-to-start blocks.

Meanwhile, Minister of state for Power, Coal & New and Renewable Energy (Independent Charge) Piyush Goyal today, 4 December 2014, said in a written reply to a question in the Lok Sabha that Coal India has been indicated a gross target to produce 1000 Mt. of coal by 2019-20, which is about double the amount of present level of coal production. The expected growth is to come from identified future projects. Goyal further stated that the envisaged growth is possible in the brown field as well as green field areas and is expected to be achieved through on timely completion of 'New Railway Infrastructure Projects', faster environment & forestry clearances, completion of Rehabilitation & Resettlement with the help of State Government, Improvement in Law & Order situation apart from technology improvement in mining and related infrastructure.

The Union Cabinet has already approved divestment of 10% stake in Coal India.

On a consolidated basis, Coal India's net profit fell 28.17% to Rs 2192.38 crore on 0.6% growth in total income to Rs 17700.12 crore in Q2 September 2014 over Q2 September 2013.

Coal India (CIL) is an organized state owned coal mining corporate.

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