KOLKATA (miningweekly.com) - India’s Coal Ministry has advised against the disinvestment of government's equity holding in Coal India Limited (CIL) until pending receivables for supplies made to power utilities and industrial relations issues were settled.

In a communication to the government, the Coal Ministry opined that the value of the equity that it was proposed would be sold off to private investors, would be adversely impacted unless the $1.6-billion owed to CIL by various power generating companies, including NTPC Limited, was expeditiously cleared.

Last month, a Group of Ministers cleared disinvesting 10% of the 90% equity holding of the Indian government in CIL, which was expected to fetch the government $3-billion.

The Coal Ministry has maintained that disputes between the coal miner, which accounts for around 80% of domestic coal supplies, and power generating companies should be settled within the purview of fuel supply agreements, and power utilities should withdraw claims that poor quality coal supplied by CIL was grounds for withholding payments.

The Coal Ministry further pointed out that workers and employees of CIL were against larger equity stakes for private investors and that any disruption of mining activities by worker strikes would not only impact the disinvestment process but aggravate the current shortage of coal in the domestic markets.

Recognised trade unions operating in CIL have threatened to go on an indefinite strike if the government goes ahead with equity disinvestment.

The unions have pointed out to the Coal Ministry that at the time of CIL’s 2010 initial public offer of 10% of its 90% equity to private investors, the government had assured workers that no further equity sale would take place, and added that the current equity sale plan was not only a breach of earlier government assurance but an indirect creeping privatisation of the government-owned largest coal miner in the world.

The recognised trade unions in CIL are All India Trade Union Congress, Centre for Indian Trade Unions, Indian National Trade Union Congress and Hind Mazdoor Sabha, which collectively represent 363 000 of the nonexecutive workforce of CIL.