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  1. Editorial: Coal breakthrough

Editorial: Coal breakthrough

Govt does well to resolve the miners’ strike

By: | Published: January 9, 2015 12:41 AM

The last time Coal India Limited’s (CIL) miners threatened to go on strike, when the UPA was in power, the government backed off and never sold the CIL stake it had planned to. This time around, the stakes were even higher, for the government as well as the CIL miners. It wasn’t just the R24,000 crore the NDA needed to get from divesting a 10% stake in CIL, there was also the future of opening up of mining sector that was at stake—for the miners, this was seen as the end of the world with their jobs at stake. Add to this the huge shortage of coal—currently 250 million tonnes, or half of CIL’s production, if power plants were to run at 85% PLF—and it is obvious the coal sector needs a massive ramp up. This means infusion of a whole lot of new technology in CIL which has one of the lowest productivities in the world, and it also means bringing in top-notch global miners into India—no industry, no matter how efficient it is, does well unless there is competition. That is why, for instance, Australia’s mine reserves have risen more than 3 times in the last 30 years as compared to just 20% in the case of India.

Had the threatened 5-day strike of CIL gone out of control, all of this would have been jeopardised. Coal minister Piyush Goyal did well to sit down with the miners to discuss why they had a stake in the modernisation being planned. To meet just the FY15 targets requires the government to significantly step up the availability of railway rakes; doubling production by FY20 requires a whole lot more—creating more railway lines, opening up new mines, etc. Coal India’s PE ratios are just a third the global average, so even if it survives in its current condition, it cannot thrive, nor can its miners. This is what Goyal seems to have impressed upon the miners. To deliver on his promise, he will have to really stretch the system, and need to do a lot more hand-holding of CIL as well, but it is important that a dialogue is going. And that he rubbished the media-driven fear that coal was being de-nationalised—if CIL becomes more efficient, it will thrive as more private players come in, as has been the case with several other PSUs such as BHEL and NTPC.

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Tags: Coal India
  1. D
    Jan 9, 2015 at 5:13 pm
    it is not that trade unions are so na�ve as to understand the writing on the wall. They have big egos hence the coal minister has to call them. They have to tell their followers that the minister has called them and ured them that CIL will not be privatised. In fact even before the strike the government was telling this. Just to protect few lakh jobs trade unions can not hold the country to ransom. one third of the potion doesn't have access to power. CIL is unable to meet its coal targets last few years. how this country can produce 1 billion tons of coal by 2019 if CIL is not efficient and private/international players step in with investments. that would automatically create jobs but of course trade unions will be jobless. unless the issue is dealt with an iron hand like the iron lady Thatcher in England who closed down all mines in the country, India will be at the mercy of these trade unions. I am not suggesting closing the mines but uneconomic mines have to be closed and surplus staff given VRS, heavy mechanisation of underground mines to produce 2 to 3 MTPA from each mine and reduce dependence on opencast mines thereby reducing environment degradation, mechanising coal transport through rly wagons and conveyor systems and stopping the dirty system of road transport of coal are some of the initiatives the unions should zealously pursue and work with the management.
    1. Satya Paul
      Jan 9, 2015 at 2:08 pm
      Well done, Piyush Goel!

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