Bloomberg News

Coal India May Face More Strikes on Higher Pay Demand

October 14, 2011

(Updates share price in fifth paragraph.)

Oct. 14 (Bloomberg) -- Workers at Coal India Ltd., the world’s biggest producer of the fuel, may go on strike for three days, demanding an increase of as much as 57 percent in bonus payments, a union official said.

The five biggest unions, which called a nationwide one-day strike on Oct. 10, will continue to push for higher payments, Tapan Sen, general secretary at Centre of Indian Trade Unions, said yesterday in a phone interview, without giving a date for the strike. The unions may consider a six-day work-to-rule, said Rajendra Prasad Singh, general secretary at the Indian National Trade Union Congress.

Labor unions globally are stepping up demands for higher wages and improved conditions as record commodity prices swell profits at mining companies, including BHP Billiton Ltd. The daylong strike at Coal India caused a production loss of 1.2 billion rupees ($25 million) and supply shortages at utilities, including state-run NTPC Ltd., India’s biggest power producer, Chairman Nirmal Chandra Jha has said.

“We’re holding talks with the unions to resolve the matter,” R. Mohan Das, director of personnel at Coal India, said yesterday in a phone interview. “I’m not able to say what the outcome may be.”

Coal India shares declined as much as 2.4 percent to 324.05 rupees and traded at 324.80 rupees as of 9:54 a.m. in Mumbai. The benchmark Sensitive Index gained 0.1 percent.

Rains, Strike

Supplies from five units of Coal India that account for about 70 percent of NTPC’s contracted quantity have been affected, the utility said Oct. 12. Heavy monsoon rain and the one-day strike caused reduced deliveries and a 4,000-megawatt generation shortfall at eight of NTPC’s stations, Jha said the same day.

Coal India’s profit for the year ended March 31 rose 13 percent to 108.7 billion rupees. The company plans to use its $9.2 billion of cash to increase production and pay more dividends, Jha said in a Sept. 22 interview.

“When both profit and dividend payout have risen, why are the workers deprived?” Sen said.

Coal India, which produced 431.3 million metric tons of coal in the year ended March 31, or 81 percent of the nation’s output, plans to increase production by about 5 percent this year to meet demand from utilities and steelmakers. Production in the first five months ended Aug. 31 fell 6.7 percent short of a target of 163.5 million tons after heavy rains flooded mines. The gap may have widened, Jha said on Oct. 10.

“The coal situation in the country is critical and I’m sure the company will not invite another stir from the workers,” said Singh, whose union is backed by India’s ruling Congress party.

Work-to-rule is a situation where workers follow the terms of their contract to the letter and refuse additional duties. The work-to-rule will stall the working of earthmovers, dumpers and shovels, Singh said.

--Editors: Indranil Ghosh, Sam Nagarajan

To contact the reporter on this story: Rajesh Kumar Singh in New Delhi at rsingh133@bloomberg.net

To contact the editor responsible for this story: Amit Prakash at aprakash1@bloomberg.net


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