KOLKATA (miningweekly.com) – State-run miner Coal India Limited (CIL) has set minimum output per man shift (OMS) for its underground mines and will curtail production from underground mines if productivity falls below such pre-fixed benchmarks.

Stung by sustained losses from its underground mines, CIL has decided to cut down costs and curtail mine operations by linking it to minimum productivity levels.

This would deal a blow particularly to Eastern Coalfields Limited (ECL), which operates CIL underground mines. The move is expected to impact on the number of days that its 54 underground mines would be operated every month.

Company officials said that operations of each underground mine would be curtailed on holidays and that the number of ‘no-operation’ days could increase if OMS in the preceding week fell below 1 t.

The officials said that, in as many as 53 mines, the OMS averaged less than 1 t and hence would be the target of curtailing of operational days and bringing down costs. The cost-cutting measures would also include stoppage of overtime payments and 25% cuts in inspection and maintenance costs except for mandatory functions like safety.

It was pointed out that ECL’s mounting losses largely stemmed from unviable operations of its underground mines with extremely low OMS compared to opencast mines under its fold. In most of its underground mines the OMS was less than 1 t, whereas the average OMS of its 20 opencast mines was 3.58 t.

However, it could not be determined whether the curtailment of underground operations of ECL was a precursor of CIL’s plans announced last year that the miner would close down 53 of its 174 underground coal mines over the next year.

In 1973, when the coal industry was nationalised, CIL inherited 700 underground mines many of which had been closed down over the years owing to unviable operations or having exhausted its resources. Currently, underground mines contribute only 5% of CIL’s production of 610-million a year.