Coal workers oppose privatisation


Report by Kamgar Ekta committee (KEC) correspondent


Coal workers have been opposing privatisation of coal mining since the 1990s. They held an Anti-Privatisation Convention in Asansol in West Bengal under the aegis of Colliery Mazdoor Sabha of India (CMSI) recently. The convention highlighted how the Central government was privatising coal industry through various measures.

Workers at the Convention pointed out that lately the revenue-sharing model is being used for handing over coal mines to private companies. The private company is required to pay just 4% of its profits as fee. Already 36 coal-mines have been handed over to private companies through this model. This way the mines are first developed by the public sector enterprises using public money and then private companies are given the ready-made mine infrastructure to make profits and pay next to nothing for the infrastructure development.

The justification given by the Central government is that many of the subsidiary companies of Coal India, like the Eastern Coalfields Limited (ECL), are loss making and that by involving private players through a “revenue-sharing model”, the finances of these would be improved. However, these claims are hollow since such moves will worsen the finances of the coal public sector units (PSUs) by transferring more and more of the profitable coal mines of the PSUs to private companies while the loss-making mines will be left with the PSU.

For a very long time the maintenance of old underground mines has been neglected. This neglect has led to many underground mines becoming unusable. The Central government itself is responsible for the financial sickness of the PSUs in the coal sector.

The dilution of the Central government’s shareholding in Coal India Limited has been another step towards privatisation of the coal sector. Step by step 37% of shares of Coal India, owned by the government, have been sold off.

Speakers explained how the coal PSUs raised the production of coal to meet the growing requirement for development of the economy. They emphasised that coal production was nationalised between 1971 and 1973 because the private companies producing coal before this were unable to meet the demands of the power and metallurgical sectors. They were also totally negligent about the safety of workers. Coal production was just 69 Million Tonnes (MT) at the time of nationalisation, which now has been raised to 780 MT.

In spite of more than ten-fold increase in production, the ECL management has been cutting down the number of permanent workers. In the 1990s, ECL alone employed 1,82,000 permanent workers, which has now come down to only 52,000. Through various schemes, mining work is being carried out through labourers managed by contractors.

In order to produce to full capacity, ECL is outsourcing production to “partner companies” who employ contract workers. The workers in these companies are made to work for 12 hours at meagre wages and without any benefits. Moreover, they are made to work without adequate safety precautions. ECL has outsourced 33 projects in this way.

Another important reason for the coal sector becoming loss making has been that the financial resources of the coal PSUs have not been used to improve and expand the operations. Instead, hefty fees and royalties have been paid for foreign collaborations and to foreign consultants who lack the knowledge of the ground reality in India. This has led to purchase of expensive imported equipment and changes to mining operations which had to be abandoned within a short period of time. Thus, thousands of crores of Rupees have been wasted. Implementation of some of their recommendations has even led to accidents and consequent loss of life and revenue. Yet, these consultants have never been held accountable.

Coal mining has been opened up to private companies since the 1990s. The Nationalisation Act of 1973 was amended to enable the government to grant captive mines to the private sector. The captive mines of the private companies in power, steel, cement and other energy intensive sectors have deprived the PSUs of the more profitable mines. The captive and commercial mines producers produced 122 MT coal in 2022-23 which was 35 per cent more than the preceding financial year.

While the defunct and less profitable underground coal mines remain with the PSUs, the open coal mines where coal can be extracted at far smaller cost are being handed over to the private companies.

Privatisation of coal mines is the agenda of big capitalists of our country who want to control all the key natural resources of our country for maximising their profit. Coal privatisation is thus not only anti-worker but also anti-social and must be opposed!



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