Looming strike by miners raises worry about India Coal supplies

21st September 2023

By: Bloomberg


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The world’s biggest coal producer, state-owned Coal India, is facing a potential three-day strike across its core and subsidiary units, according to a stock exchange filing, prompting fears of supply disruptions across the country.

The mining giant said it wrote to India’s Chief Labour Commissioner asking to take necessary action to maintain uninterrupted coal supply, stressing that the industry is a “Public Utility Service”. Coal India’s average daily production is nearly two-million tons, which includes both coking and non coking coal. The fuel provides around 70% of India’s electricity needs.

A Coal India spokesperson didn’t immediately reply to a phone call seeking comment.

A.K. Jha, general secretary of the Indian National Trade Union Congress, said that the workers affiliated with five national trade unions have been forced to threaten a strike due to a wage dispute. He said that the workers will neither produce coal nor allow its dispatch for three days. Negotiations with management for a possible solution haven’t yet started, he added.

The strike would come as India enters the month-long Hindu festive season, during which power usage increases as factories crank up production to meet a spending surge. The season follows a particularly hot and dry summer which caused demand spikes across the country. Erratic weather also affected hydropower production, another key energy source India relies on to maintain grid stability.

As a result, state-run power producers have extended coal import mandates to replenish stockpiles.

Vikram Reddy, vice president of the rating agency ICRA, said it’s difficult to quantify the impact of a potential strike on coal production, but after the September rains lowered power demand the country’s plants should have sufficient stocks to weather the disruption, and power supply should remain unaffected.

Reddy added that given a number of state generators are currently running on low reserves, Coal India should cooperate with the government and smaller players to ensure that all plants are well stocked ahead of the strike.

A Ministry of Coal spokesperson didn’t’ immediately reply to comment requests by phone and email.

Edited by Bloomberg


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