Coal unions may come in way of PM Narendra Modi’s ‘power to all’ promise

Plans by India’s coal monopoly to buy billions of dollars of new machinery and outsource work are facing resistance from powerful unions worried about job losses, in a potential blow to Prime Minister Narendra Modi’s promise to bring electricity to all.

State-run Coal India Ltd, the world’s biggest coal miner, has already doubled output growth since Modi came to power two years ago, owing to the removal of hurdles to production like environmental clearances and land acquisition.

The increase turned coal shortages at India’s power plants to oversupply, making it one of the administration’s biggest successes.

The next phase of restructuring the notoriously inefficient behemoth is likely to be harder, however, and is crucial to the government’s ambition to sell 10 percent of the $27 billion company to raise funds for further growth and investment.

New Delhi also wants to double annual output to 1 billion tonnes by 2019/20 to meet future demand, and to do that it must radically increase productivity.

Coal India’s output-per-man shift is estimated at one-eighth of Peabody Energy Corp, the world’s largest private coal producer that recently filed for bankruptcy protection.

Already, labour unions, with a history of hostility towards management, are pushing back on Coal India’s plans, fearing modernization and outsourcing will hit jobs, said leaders of two unions that cover a majority of the company’s 371,000 employees.

Strikes, sometimes every few months, have disrupted output, although under Modi the unions have been more cooperative.

“High-tech mining will mean fewer job opportunities for labourers and no job guarantee for existing employees,” said Baij Nath Rai, president of Bharatiya Mazdoor Sangh (BMS), which says it represents 100,000 Coal India employees and contractors.

“We strongly protest this, and have already taken up the issue with the government. They will not dare do anything if there is a strong protest.”

The BMS’s view is likely to carry extra weight, as it is loosely affiliated with the Hindu nationalist group Rashtriya Swayamsevak Sangh (RSS).

Coal India Ltd