Coal India Ltd., the world’s biggest miner of the fossil fuel, is about to enter negotiations with trade unions over potentially hefty pay hikes at a time when the global push for clean energy is putting the industry’s future into doubt.
The Indian coal giant is expected to begin talks this month that could result in paychecks climbing 20% or more, bloating its more than $5 billion annual wage bill. The Kolkata-based company revises salaries of non-executive staff every five years, and the next change is due starting in July.
Talks come at an exceptional time for the coal sector. India, the third-biggest emitter of greenhouse gases, is under pressure to reduce its dependence on the fuel, which accounts for nearly 70% of electricity generation, as Prime Minister Narendra Modi’s government is pressed to take more ambitious climate action. A global rebound in coal demand this year — driven by China — will be short-lived amid the rise of renewables, according to the International Energy Agency.
Coal India’s fortunes have swung dramatically, with profits sliding, production and shipments falling and cash drying up. Any large jump in its wage bill could force the company to raise prices for the first time in three years, just as its customers are struggling to pay and arrears are piling up.
