KOLKATA (miningweekly.com) - Trade unions operating at operations held by coal miner Coal India Limited (CIL) have threatened to go on an indefinite strike to oppose the Indian government’s plan to disinvest 10% equity in the company.

According to a Coal Ministry official, trade unions representing all political parties of the country have submitted a written communication to the Ministry stating their opposition to the government disinvestment plans, which according to the trade unions, were nothing but creeping privatisation of CIL, the world’s largest coal miner.

The trade unions have pointed out that at the time of CIL’s initial public offer in 2010, the government assured company staff that there would be no more dilution of the government’s holding in CIL.

The current plans to offer another 10% of government-held equity to private investors was a breach of government assurance and the trade unions would have no option but to go on an indefinite strike across all mines and establishments of CIL if the government went ahead with its disinvestment plans.

Ministry officials said that representatives of all recognised trade unions in CIL had met Coal Minister Shriprakash Jaiswal to lodge their objection to the disinvestment plan and warned that the unions would be forced to serve mandatory notice of an indefinite strike if the government did not make a formal announcement abandoning its equity stake sale.

However, no information on the response of the Minister or the government to the talks held with the trade unions was available.

The trade unions in CIL included All India Trade Union Congress, Centre for Indian Trade Unions, Indian National Trade Union Congress and Hind Mazdoor Sabha, and collectively represented some 363 000 nonexecutive workers in CIL.

The Indian government was targeting a realisation of around $300-million through sale of its equity holding in CIL during 2013/14 as part of its plans to raise funds to bridge the country’s fiscal deficit.

India's Department of Disinvestment was shortly expected to invite bids for the appointment of merchant bankers and legal advisers for the CIL equity sale to investors.

The threatened indefinite strike came at a critical time for CIL, which had been struggling to increase production and was facing flak from user industries, particularly thermal power producers, for the shortage of coal in domestic markets.

Between March 2012 and April 2013, the coal miner was expected to fall short of its production target of 464-million tons by 12-million tons, according to information provided by CIL.

CIL had, over the past several years, been persistently missing production targets set in consultation with the Coal Ministry. So much so, that the miner now wanted to abandon the system of setting yearly production targets and instead wanted the Ministry to set yearly coal sales targets on the plea that the company could meet shortfall in production from inventories held by it.