Help Desk -
9717405332, 9599714297, 9810335381

5 Trade Unions Called a Strike on September 24 Protesting Against FDI

Coal News - Published on Wed, 18 Sep 2019

Image Source:
Money Control reported that a frisson of anxiety is running through the corridors of Coal India after the Union cabinet late last month allowed 100 per cent foreign direct investment under the automatic route in coal mining and associated infrastructure. While the top echelons of the public sector behemoth are apprehensive about losing near-monopoly, five trade unions, representing the workers of the state-owned miner, have called a strike on September 24 protesting the move. The August 28 step of the government is a follow-up to its decision in February last year when it allowed auction of coal-bearing blocks to private parties for commercial mining. So far, 100 per cent FDI via the automatic route was allowed in coal and lignite mining for captive consumption by power, steel and cement units.

Also, 100 per cent FDI was permitted via the automatic route for setting up coal washery, but the FDI firms could sell washed coal only to those units that supply raw coal for processing, and not in the open market. Under the latest decision, 100 per cent FDI will now be allowed in not only mining for sale in the open market but also for associated infrastructure such as washery, crushing, coal handling and separation.

However, the government’s move last year to open up the coal sector, has not borne fruit so far as local players such as the Adanis, the Tatas and the GMR group have evinced little interest. The absence of a facility to tie up with global players is cited as a reason for the tepid response. And this is perhaps exactly the worrying point for Coal India. With 100 per cent FDI now allowed under the automatic route, there is a feeling local players would tap global mining giants such as BHP, Rio Tinto and Glencore, who have deep pockets and high-end technology, to foray into coal mining. The government-owned coal miner is apprehensive that such a move will lead to its losing consumers and pricing power.

Coal India’s concern perhaps stems from the fact that despite being a near-monopoly it has missed production target for the thirteenth consecutive year in 2018-19. The world’s largest coal miner has been forced to delay the production target of 1 billion tons by two years till financial year 2024-25.

Source :

Posted By : Rabi Wangkhem on Wed, 18 Sep 2019
Related News from Coal segment