Coal India expects wage cost to fall as large chunk of staff set to retire

CIL, which has been given a target to increase coal production to 1 billion tonnes by 2020, also wants to fully mechanize its mining in the years to come


Coal India Ltd chairman Sutirtha Bhattacharya says 94-96% of open cast mining is done mechanically at present. Photo: Bloomberg
Coal India Ltd chairman Sutirtha Bhattacharya says 94-96% of open cast mining is done mechanically at present. Photo: Bloomberg

Kolkata: Coal India Ltd (CIL) expects the contribution of its wage cost to its total cost of production to drop from 53% at present to around 30% over the next 6-7 years as a large chunk of its workforce would retire.

The miner, which has been given a target to increase its coal production to 1 billion tonnes by 2020, also wants to fully mechanize its mining in the years to come.

CIL chairman Sutirtha Bhattacharya said the company is continuously trying to increase production through mechanized mining. “The path is to go towards fully mechanical technology,” Bhattacharya said.

He also said around 94-96% of open cast mining is done mechanically at present. To boost production, CIL depends on open cast mining. However, the process requires uprooting of trees and dislocating people.

Meanwhile, the company has received clearance from the environment ministry to expand its underground mining project at Jhanjra in West Bengal. CIL is going to do “most modern underground mining”, Bhattacharya said, adding that at Jhanjra, it will be around 3.1 million tonnes of underground mining.

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To meet the ambitious target of 1 billion tonnes production in the next four years, the company has to increase production in its existing mines, open new mines and have to “definitely” go for mechanized mining, R. Mohan Das, director, personnel and industrial relations, said.

The latter is also expected to reduce CIL’s workforce requirement over the years.

However, Bhattacharya said the purpose for opting for mechanized mining is not to reduce wage cost but to boost production.

The current employee strength of the state-run coal miner is around 323,000, of which over 100,000 employees are likely to retire in the next few years. Over the next 6-7 years, its employee strength would be less than 200,000 and its wage contribution to its total cost of production is likely to come down to 30-35% during the period, Das said.

While a chunk of its workforce would retire, CIL also plans to induct around 30,000-35,000 people during this period. Das said the company would hire around 4,000-5,000 people every year of which around 800-1,000 would be officers.

Of its 323,000 employees, around 70,000 of them are officers. While retirement would happen both at officers and workers level, a sizeable amount of retirees at the the officers level is also expected to bring down CIL’s wage bill over the years.

The company, which has its mines in some of the Maoist belts, also offers employment to a wide section of the tribal population in these areas.

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