Coal India Ltd (CIL) plans to reduce its manpower by five per cent each year over the next 5-10 years to improve productivity and curtail costs. The company has an employee base of 2,72,445 as of FY-20.

The State-owned miner is also looking to close down unviable mines in a “phased manner” as a part of its cost cutting measures. There are close to 158 underground mines, which employ around 43 per cent of the workforce, whereas its contribution to total production is merely around five per cent.

“Action is being taken to close the unviable mines in CIL in a phased manner. Production from 11 such underground mines has already been suspended,” the company said during an earnings call a day after declaring its financial results during the March quarter.

CIL, which has taken steps to upgrade the mechanised coal transportation and loading system under ‘First Mile Connectivity’ projects, expects the infrastructure created to reduce costs.

Under Phase I, it has so far tendered 35 projects, of which three projects of 30 million tonnes (mt) per annum have been commissioned. The total capacity of the projects is close to 414.5 mt at an estimated investment of ₹10,500 crore. Under Phase II, the company plans to tender around 14 projects with total capacity of 100 mt at an estimated investment of ₹3,500 crore. It aims to complete all projects under Phase I by FY-24 and those under Phase II by FY-25.

These projects would help increase mechanised evacuation to around 665 mt per annum from the current 150 mt per annum.

“The company incurs around ₹3,900 crore on coal transportation charges annually. This can decline with improvement of first mile connectivity by mechanisation,” it said.

Output increase

The company is also looking to enhance output through MDO (Mine Developer cum Operators).

For efficient operationalisation of greenfield projects, CIL has devised a plan to engage MDO for 15 projects (10 opencast and five underground) with a combined total targeted capacity of about 160 MTY.

“Out of the 15 projects, work order has been issued for two projects of 45 mt per annum. Remaining projects are at various stages of tendering and approval of NIT (notice inviting tender),” the company said.

CIL had, on Monday, reported a marginal drop (less than one per cent) in consolidated net profit at ₹4589 crore for the quarter ended March 31, 2021, as against ₹4626 crore same period last year.

Revenue from operations on consolidated basis dropped by nearly three per cent at ₹26,700 crore during the quarter under review as compared with ₹27568 crore same period last year.

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