Cost cutting: Coal India announces plan to cut 5% jobs every year for next 5-10 years

• Coal India has 2,72,445 employees on its rolls
• As part of its cost-cutting measures, Coal India also plans to close unviable mines

New Delhi: State-run Coal India Ltd (CIL) has announced its plan to cut jobs by 5 percent every year for the next 5-10 years as part of its cost cutting measures. In a presentation to the investors, the coal miner said that it has 2,72,445 employees on its rolls as of FY2019-20. The attrition exercise will reduce the workforce at Coal India significantly as in addition to layoffs, a large percentage of the PSU's workforce is due to retire in the years to come. Coal India's employee strength has fallen by 57,000 since 2015 to 2,76,000 until January 1, 2020, according to figures revealed by the coal miner. And the coal miner expects manpower to contract by a further 97,000 by 2024, when it is expected to produce 1 billion tonnes of coal.

As part of its cost-cutting measures, Coal India also plans to close unviable mines. There are 158 underground mines that employ 43 percent of Coal India employees but contribute 5 percent of the total production. "Action is being taken to close the unviable mines in CIL in a phased manner. Production from 11 such underground mines has already been suspended," CIL told investors.

Cost-cutting: CIL to enhance output through engagement of MDOs

Further, Coal India said that for efficient operationalisation of greenfield projects, it has devised a transformative plan to engage MDO for 15 projects (10 OC and 5 UG) with a combined total targeted capacity of about 160 MTY. Out of the 15 projects, work order has been issued for two projects of 45 MTY. Remaining projects are at various stages of tendering and approval of NIT, said CIL.

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The coal PSU added that first-mile connectivity and infrastructure creation will also be undertaken to control transportation costs.

CIL cleared 36 mining projects of 332 MTPA capacity in FY21

A total of 36 coal mining projects have been cleared by CIL and its subsidiaries in FY21 with a rated capacity of 332 mtpa and sanctioned capital of Rs 59, 227 crore. In addition to this, five non-mining projects having a capital of Rs 6,843 crore was also cleared by CIL in the previous financial year. Around 114 major ongoing coal projects with peak capacity of 836.48 MTPA are under implementation currently.

First-mile connectivity

CIL has taken steps to upgrade the mechanised coal transportation and loading system under 'First Mile Connectivity' projects. Under Phase-I, 35 projects have been tendered out, and three projects of 30 MTPA have been commissioned. The first phase will add increase CIL's first-mile connectivity capacity by 414.5 MTPA and will entail an investment of Rs 10,500 crore.

A total of 14 projects with total capacity 100 MTPA will be developed under Phase-II and will require an investment of Rs 3,500 crore. While the first phase is to be completed by FY24, phase II is expected to be wrapped up in FY25. "Company expects >12% IRR, improvement in coal quality, savings in under-loading charges and a positive impact on the environment," said CIL.

CIL's capex target for FY22 is Rs 17,000 crore

The coal miner said that its capex target for FY22 is Rs 17,000 crore. In FY21, Coal India spent Rs 13,115 on capex against a target of Rs 13,000 crore. The government has asked PSUs to increase capex spending in order to provide a fillip to the economy and boost investment. 

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