India News
Search Web Directory
 India News  
News Home
Pay hike blunts CIL edge before tougher race
Posted on 13th October 2017
KOLKATA: Coal India workers may be celebrating the 20% salary increase they won after a hard bargain, but with every such hike, the monopoly state-owned company may be rendering itself uncompetitive in terms of production cost just when the sector is set to be opened soon for private commercial mining.

Following the salary revision, labour accounts for 55% of the cost of production at Coal India compared with 50% previously and about 22% for most private coal miners.

The cost of extraction at the open cast mines of Coal India subsidiary Mahanadi Coalfields is about Rs 600 per tonne. Outsourced extraction costs about Rs 400 per tonne.

“The difference is basically labour cost,“ said a senior Coal India executive. “The recent salary hike would require Coal India to spend an additional Rs 5,667 crore annually. It is expected to increase the cost of production from Rs 1,190 per tonne to Rs 1,230 per tonne ­ a Rs 40 per tonne rise. Of this, Rs 600 per tonne would be labour cost. The average selling price is about Rs 1,500 per tonne.“

Most of Coal India's 2.98 lakh workmen are employed in underground mines, inherited when the company was formed. The cost of operations at these mines is very high, the executive said.

“We are now planning to close down some 100 such mines that are unviable. It is expected to bring down costs,“ he said.

In contrast, a very large mine operator is able to extract coal for its captive power plant at Rs 600 per tonne. An executive from this company said: “We use large equipment and latest technologies. Labour cost is less than 10% and comes to about Rs 50 per tonne.“

An executive from another large private company that offers mine development operating services said its labour accounts for 5% to 22% of production costs, depending on the thickness of the topsoil to be removed to extract coal.

“We need to quote costs that our customers find attractive. This we n achieve through multitasking. An individual who is a mining engineer can double up as a supervisor t and a technical guide. Use of better technology also keeps costs low. Average cost of production for mines that need heavy over burden removal is between Rs 600 and Rs 650 per tonne,“ said a senior executive from the company.

He said the differences are basically on labour cost, efficiency , higher productivity and lower margins from having one contractor for all activities on a turnkey basis.

Coal India worker unions are aware they may not be able to compete when private companies start selling coal, which is why they oppose the government's move to commercialise coal mining in the country .

“Private operators pay a fraction of the salaries that Coal India pays and we intend to intensify our movement against commercialisation in the next few days. It would include strikes next month to start with,“ said SQ Zama, secretary general of the Indian National Mineworkers' Federation.

The Coal India management, on the other hand, is starting to work on strategies to help them stay ahead, even though some said the company is unlikely to be in for competitive trouble.

“Coal India is likely to maintain its dominant position in the industry due to its global scale of operations, existing evacuation infrastructure and customer base,“ said Jayanta Roy , senior vice-president and group head corporate sector ratings, at ICRA. “The success of commercial mining, on the other hand, will depend on the nature and potential of the mines offered, infrastructure requirements as well as ability of miners to ramp up operations quickly , besides government policies in this regard.“

Former Coal India chairman Partha Bhattacharyya said the recent wage accord will increase the cost of production only initially.

“Nevertheless, it will get offset over time with a rise in coal production and reduction in manpower. A satisfied workforce will enable CIL to meet competition from commercial mining squarely,“ he said.

Related Companies: Coal India Ltd   

Other Latest News
 
Powered by Microsoft's digital assistant Cortana,the "Invoke" smart speaker will be available starting October 22, the software giant and Samsung subsidiary Harman Kardon have announced.

"The Harman Kardon 'Invoke', Microsoft's answer to Amazon Echo and Google Home, will be available October 22", The Fortune reported late on Friday.


 
At a time when customers are rushing to link all their bank accounts with Aadhaar, the Reserve Bank of India (RBI) on Saturday clarified that it never issued any such directions and it was the decision of the Indian government.

The apex bank further clarified that in applicable cases, linkage of Aadhaar number to a bank account is mandatory under the Prevention of Money-laundering (Maintenance of Records) Second Amendment Rules, 2017.


 
Stockholm: Sweden’s AB Volvo reported a bigger-than-expected rise in quarterly core earnings on Friday, as a broad upturn in demand for heavy trucks more than offset costs stemming from a strained supply chain.

Sweden’s biggest manufacturer by sales also raised its outlook for truck markets on both sides of the North Atlantic this year and forecast a further strong recovery in industry-wide sales of commercial vehicles in North America in 2018.


 
Demand for economy segment motorcycles — an indicator of the demand scenario in the rural market — is again on the rise in the first six months of the current financial year after staying subdued in the last three fiscals due to inadequate rainfall, the adverse impact of the demonetisation move and a ban imposed by the Supreme Court over the sale of BS III vehicles. In April-August, most of the Hero MotoCorp and TVS Motor offerings in the segment showed an improvement.

 
HYDERABAD: GMR Hyderabad International Airport has announced raising $350 million, or about Rs 2,276 crore, in the international bond market, reflecting the third consecutive US dollar bond offering by GMR Group.

GMR Hyderabad International Airport (GHIAL), a subsidiary of GMR Airports and step down subsidiary of GMR Infrastructure, in a statement on Friday said it plans to entirely refinance the outstanding rupee term loans and external commercial borrowings, apart from deploying them towards partial funding of proposed capital expenditure.


» Post a FREE Classified Advertisement
Inviting Real Estate Agents, Job Placements Agents, Educational Institutes, Software Service Providers, Real Estate Builders, Marriage Bureaus, Travel Agents, Restaurant Owners, Health & Fitness Centers and other Local Businesses to Post a FREE Classified Advertisement on IndiaCatalog.com Classifieds Website.
Jobs in India India Real Estate Automobiles Matrimonials Beauty & Fitness

Add a comment for Pay hike blunts CIL edge before tougher race
Please only use this form to enter comments on the above company. All comments are reviewed before they are displayed on the web site. Not all comments may be displayed. Check back with us to see if your comments have been displayed.
If you want us to email the comments posted by users, please Subscribe by email
Name*
Comments*
Security Code*
 

Be the first person to write a business review for Pay hike blunts CIL edge before tougher race

Most Read News

Reliance Industries eyes selling US shale assets, but only at fair valuation

Reliance Industries, Adani Transmission, Petronet LNG hit record high

Maharashtra Gram Panchayat Elections: BJP leave Cong, Sena, NCP in the dust; win 1311 seats out of 3692

Bajaj Auto Q2 net profit dips marginally to Rs 1,194 cr

New Sebi panel to review stock exchange norms

More India News

India Resource Center
» Free India Classifieds
Introducing IndiaCatalog Free Classifieds. Post your free classified ads. Inviting Real Estate Agents, Travel Agents, Job Placement Agents and others to post their advertisements for free.
» Global Web Directory
Web directory listing of Global companies. Send enquiries to international companies.
» India Yellow Pages
Yellow Pages for Mumbai, Delhi, Bangalore, Chennai, Kolkota, Hyderabad, Pune and more Indian cites.
» Logistics Directory
Find supply chain management consultants, freight forwarders, trucking companies in India.
» Photo Gallery
This page provides you with links to images of India displaying Celebrities Photos,Automobiles Photos,latest Movies Photos,Sports Photos,Photos of Bollywood Stars and many more.
» Agriculture Directory
Find Fresh Vegitables, Fruits, Basmati Rice, Meat, Poultry and Seafood producers in India.
» Real Estate in India
Real Estate directory of India. Find agents, builders and suppliers.
» Gems & Jewellery
Find jewellery, gems and diamond merchants in India.
IndiaCatalog.com
  India Web Directory
Business Profiles
Automotive Directory
IT/ITES/BPO Directory
Hotel Directory
Health Directory
Business Directory
Gems & Jewellery
Education Directory
Real Estate Directory
Agriculture Directory
Logistics Directory
Yellow Pages
NRI Guide
Photo Galleries
Global Web Directory
*** FREE India Classifieds
Safety Tips For Classifieds
Order Premium Listings
Submit a Site
Business Reviews
Home
About us
Link to us
Advertise
Contact us
Google Search Keywords: India Catalog, IndiaCatalog, India Web Directory, India Free Classifieds
    © 1999 - 2017 IndiaCatalog.com
    All Rights Reserved
Privacy Statement    
    © 1999 - 2017 IndiaCatalog.com
    All Rights Reserved
Privacy Statement