Allowing Private Firms in Coal Mining Compromises the Rights and Safety of Workers

Amidst strong opposition from central trade unions, the BJP-led government has approved the methodology for the auction of coal mines for sale of coal which opens up coal mining for the private sector. 

“Opening up coal mining to private sector is a way to total privatization and government aims to hand over the mines to the private companies including multinational companies,” said D.D. Ramanandan, General Secretary of All India Coal Workers Federation (AICWF) which is affiliated to Centre of Indian Trade Unions, while speaking to Newsclick. 

Cabinet Committee on Economic Affairs (CCEA) approved methodology for the auction of coal mines/blocks for sale of coal under the Coal Mines (Special Provisions) Act, 2015 and the Mines and Minerals (Development and Regulation) Act, 1957, on Tuesday. 

“Opening up of commercial coal mining for the private sector is the most ambitious coal sector reform since the nationalisation of this sector in 1973,” the press release read. 

However, the move seems to be aimed at privatizing nationalized coal companies, Coal India Limited (CIL) and Singareni Collieries Company Limited (SCCL).

“In a recent document, Coal Vision 2030, it had suggested that no new coal mines need to be allocated or auctioned beyond the current pipeline. The total capacity of mines allocated and auctioned, including Coal India SCCL and Neyveli Lignite as on date is about 1,500 million tonnes per annum at the current rated capacity.

“Though the document suggested that there is no need of new external entities to meet the Coal Vision 2030, Government has gone ahead with their policies, of course, to crack down the nationalized Coal industry,” Ramanandan pointed out the government’s determination to privatise coal mines. 

“About 3 lakh workers are there in CIL and more than 60,000 in SCCL. So the privatization drive will affect the workers who earn salaries as per wage bill. If new private companies come to market, their expenditure for salary will be less than 10 percent of their total expenditure as they pay a very meagre amount of Rs 5,000 or Rs 6,000. Exploiting the workers, they can produce cheap coal. Then, of course, the buyers will go for cheap one and it will eventually lead to the termination of state-owned CIL and SCCL,” said Ramanandan. 

Though the government claimed this reform was expected to bring efficiency into the coal sector by moving from an era of monopoly to competition, AICWF General Secretary pointed out government’s repressive policies on the state-owned coal companies. 

“During 2015-16, CIL had Rs 63,000 crores as a cash reserve. But the government has withdrawn nearly Rs 43,000 crores in the name of some payback, extra dividend, special dividend, etc. That means CIL’s cash reserve fund is decreasing. Moreover, CIL needs Coal Ministry’s approval for the investment of stuff which worth more than Rs 5,000 crores. While the latest technologies in private companies will allow them to extract a huge amount of coal,” he added. 

“As such retrograde decision by the Modi Govt is nothing but a total reversal of the four-decade-long policy of nationalized coal mining which contributed immensely to industrial development as well as the expansion of the power generation capacity of the country’s economy. Such opening up of coal mining sector for unhindered exploitation by private and foreign corporate without any restriction on pricing and end-use will definitely pave the way for weakening and privatization of public sector coal industry,” Centre of Indian Trade Union (CITU) said in a press release condemning the decision of the government. 

“Proliferation of private coal mining will severely compromise the rights and safety of the workers deployed in private mining; further withdrawal of all restriction in the pricing of coal and their end-use will increase the burden on the people many times. Such unrestricted private mining of coal will also severely impair energy security of the country in a big way”, said CITU.