Coal Is Just Not Black Gold

Topics: Mining, Coal mining, Coal Pages: 14 (4836 words) Published: March 24, 2013
Drawing upon the organisation in which author is familiar – Coal India Limited, largest coal producing company in the world, In this paper he critically analyses few existing policies implemented by Government of India and Coal India Limited in mining industry from past few decades, works through the complex problems around Coal mining in India and identifies few human resource management related problems and how they have contributed for the company’s stagnation in recent years. The author then critically analyses the issues, compare it with relevant literature and evaluate the limitations. Based on the literature and observations, he then proposes few strategic recommendations to improve organisational effectiveness both to Law makers and to company. INTRODUCTION

Coal India Limited (CIL) is a Government of India Undertaking, Maharatna (Country’s Jewel) company which employees 400,000 people approximately as of April’12. In ended last financial year, with net annual sales of 15 billion dollars, and a net annual operating profit of 3 billion dollars approximately by producing coal from its 466 Coal mines across India and selling it to Power generation companies. It is the biggest and only listed company in the sector, where private companies are not allowed to compete, Thus accounting to 80% of Annual national production of Coal in India. CIL has five unions, which represent all the employees in the company. Since the company is only major coal producer and acts more like a monopoly in the sector, wages are low compared to Industry average in other countries. Coal India apart from producing coal on its own also gives few coal mines to private third parties for contract. These mines are smaller in size and remote for the company to allocate resources, hence they are contracted. This strategy of contracting coal mines and not having enough regulations around Coal production has led to few private contractors preferring illegal means of employment in these coal mines and not allowing private competitors to compete with Public sector companies COAL IN INDIA

Indian Coal Industry currently occupies third position by producing 400 metric tons per year ( mtpy), after US (1100 mtpy and China 2400 mtpy. Within the country Coal mining is nationalized and accounts for 60 per cent of electricity production. Coal being crucial resource for economic growth, it is safeguarded by government by passing many acts, Indian Mines Act of 1952, Mines and Minerals Regulation and Development (MMRD) act are the key legislative act meant for protecting labour working in mining industry and governing mining and exploration in India respectively. After further revision in 1993 and 2002, National Mining Policy was outlined by Government of India whose objectives are mineral development through exploration in both Onshore and Offshore fields. Policy is meant to promote mineral industry standardize training and research, considering future needs of the country with minimal impact of nature and ensure safety and health of all people involved in the industry. These objectives do make a progress in standardizing the rules, however it has to clearly describe how the law handles informal mines and how to deal with illegitimacy under current law. According to a Journalist expert of small mines Chakravorty (2002), Illegal mines in India constitute of 88 per cent of the total reported mines in count, producing approximately 10 per cent of the total value of mineral production of the country. This number has increased in the last decade , where 30 per cent of illegal mining. These mines comprise of poor people toiling for lowest wages and almost negligible security, health and safety conditions. According to MMRD Act, Mines Act and other Environmental Acts, all minerals are broadly classified into “Major” and “Minor” and rest the responsibility of mining with the state. MMRD has further classified mines has Class A...
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