Coal India Unions Seek Taxes on Imports to Protect Marketshare

  • Unions hope better performance will help in pay negotiations
  • Coal India unions plan strike March 29 if demands not met

Coal India Ltd. unions are demanding raising import taxes to help the domestic miner protect marketshare and in turn enhance workers’ ability to negotiate higher wages for the five-year period starting July 1.

“Indian coal industry needs protection from imports,” said S.Q. Zama, secretary general at the Indian National Mineworkers’ Federation, a unit of the Indian National Trade Union Congress. “We want Coal India to be able to sell all that it’s producing. And if it can’t do so, it will limit our ability to negotiate wages.” INTUC is one of the five major unions at the company.

India’s imports of steam coal rose almost 7 percent to 161.2 million metric tons in 2015, according to data compiled by Bloomberg. India levies 2.5 percent basic import duty and 2 percent countervailing duty on all varieties of coal currently.

Higher taxes are part of a series of demands by the unions that have threatened a one-day strike on March 29 if they aren’t met. The unions of the state-owned monopoly miner announced a five-day strike in January 2015 to protest a share-sale plan. The strike was called off prematurely after talks with the government.

Coal India revises wages for non-executive employees every five years. The world’s biggest miner of the fuel raised gross wages by about 25 percent during the last revision.

‘Market Coal’

Separately, federal Coal Minister Piyush Goyal suggested that the company may have to cut prices to move unsold inventory.

“We are struggling to see how we can sell more coal quickly to liquidate some of the stocks,” Goyal said in Kolkata on Thursday. “I am seeing a situation where we have to gradually peter down the growth in coal production because of our inability to market that coal.”

Coal India sold 138 million metric tons of coal in the three months ended Dec. 31, and produced 144 million tons, according to stock exchange filings. Stockpiles at power plants, the company’s biggest customers, also rose to a record 34.2 million tons as of Jan. 27.

Thermal coal price at Australia’s Newcastle port, considered an Asian benchmark, plunged 21 percent in the past year to $49.85 a ton.

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