State-owned Coal India, the largest coal-producing company in the world, will shut down 37 of its mines by the end of this fiscal year, two company officials were reported by Reuters as saying earlier this month.
The decision was reportedly taken due to the economic unviability of these mines. Coal India and its subsidiaries reportedly assess profit- and loss-making operating mines on an annual basis for a comparative study of performance to list out the unviable ones.
“Quite a number of these mines are incurring huge losses, and their production is miniscule. So, Coal India is looking to close mines that are not profitable,” the official said.
Coal India, which accounts for around 80% of India’s coal production, has recorded consistent losses in recent months. It reported lower profits in the last four quarters due to high costs and recently slashed its annual coal production target by a tenth due to low demand.
Some of the to-be-shut mines have not been able to recover costs in the form of even salaries paid to the workers.
One of the reasons for the coal industry’s dip in profits has been India’s robust push towards renewable sources of energy and the explosion of the solar and wind energy industries in the country.
Unions threaten strike
Coal workers unions, which say they represent over 4,00,000 employees of Coal India, have opposed the move, threatening a three-day strike if the decision is not withdrawn.
The move will lead to the redeployment of about 11,000 workers, who will be transferred to opencast mines that need greater labour and produce more coal, one of the officials said, adding that the company is negotiating terms with the unions.
Five central trade unions had served a three-day strike notice to protest a host of issues including commercial mining of coal.
Coal India operates 413 mines, of which 207 are underground, 176 are open cast and 30 are mixed.