Coal India struggles to produce half of normal output amid strike

Output could fall further if contract workers join the strike, say officials

Coal India Ltd struggled to produce and ship less than half of its daily target on the first day of a five-day worker strike that began on Tuesday, hampering government efforts to reform the country's coal industry and ease its power crisis.

Unionized miners at the world's top coal producer are protesting Prime Minister Narendra Modi's move to allow private companies to mine and sell the fuel for the first time in 42 years. Modi's ministers have said that increasing competition is key to ending India's power shortage.

But miners fear this will lead to pay and job cuts at Coal India, which has come to be seen as an exemplar for deep-rooted inefficiency in state enterprise.

Union leaders met top Coal Ministry officials for three hours on Tuesday evening but did not reach an agreement, said S Q Zama, secretary general of the Indian National Mineworkers Federation.

Zama said unions would end the strike if the government assured them that private companies would not be allowed to do any commercial mining for at least the next six months and that more talks would take place before the industry was opened up.

The leaders of Coal India's five trade unions are in New Delhi for more "political" talks, Zama said.

Coal Secretary Anil Swarup, who headed the Tuesday meeting with the union leaders, could not be reached for comment.

Coal India produced 645,000 tonne on Tuesday, less than half of its usual daily output at this time of year, mainly using contract workers, a company official told Reuters.

It dispatched about 800,000 tonne from new output and stocks from railway sidings, another official said.

But the output could fall further if any contract workers join the strike, the officials said.

Coal India has a permanent workforce of 286,196, excluding supervisors and executives, and also employs about 65,000 contract workers.

Known for its industry-lagging productivity, Coal India digs out about 1,100 tonne of coal per employee a year, compared with 36,700 tonne per employee at US-based Peabody Energy and 12,700 tonne per employee at China's Shenhua Energy, according to industry body Assocham in New Delhi.

Coal India has fallen short of its output targets for the last six years, making the country the third largest coal importer despite sitting on the world's fourth largest reserves of the fuel.

The latest strike at Coal India would exacerbate the shortage for power companies such as Tenughat Thermal Power Station in eastern India, the power company's managing director Ram Avatar Sahoo said.