With lower headcount, Coal India’s costs expected to fall further

The cost of wages, which was 55% of production in 2017-18, has reduced to 49.5%, because there are fewer employees and better equipment now.

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 Coal India’s workforce is expected to be reduced by 40,000 by 2024. Not only will it have a leaner workforce, it will also be using advanced equipment to stand up to the severe competition from private players.  While the state-owned coal mining and refinery company will have about 8000 to 10,000 employees retiring annually, it will only be hiring about 2,000 to 3,000 people every year, to fill the absolutely critical and statutory roles.

The Company will offer jobs to people who lose their land to new mines and are forced to let go of their property in the face of expansion of existing mines.  Since 2015, the strength of the workforce has fallen to 276,000, which means about 57,000 employees less.  Within the next five years, about 97,000 more will leave, whereas the production target is set at a billion tonnes.

With the workforce set to get trimmer and equipment with higher capacity being introduced, the proportion of salaries and wages in the cost of one tonne of production will also fall drastically. About five years back, one worker produced about 6.2 tonnes of coal in a single eight-hour long shift. This productivity went up to 8.51 tonnes last year, and will only increase further.

The Company is targeting 750 million tonnes in 2020-21 and hopes to reach the goal of a billion tonnes by 2024.

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