Coal India to resume output at big field shut by labour protest

BHUBANESWAR/NEW DELHI, India Tue Dec 3, 2013 8:27am EST

BHUBANESWAR/NEW DELHI, India Dec 3 (Reuters) - Coal India Ltd said it would resume full production on Wednesday from a major coal field that was closed on Friday due to a labour protest, cutting off a supply of about 200,000 tonnes a day to power producers and others.

The Talcher field, comprising seven open cast mines, is run by the Mahanadi Coalfields unit, which last fiscal year acounted for nearly a quarter of the output from state-owned Coal India, the world's biggest coal producer.

"Today we started production at half of our capacity and expect to resume full production from tomorrow," Mahanadi Coalfields Chairman A.N. Sahay told Reuters.

Mahanadi Coalfields, with operations in eastern Odisha state, supplies power producers such as NTPC Ltd and aluminium maker National Aluminium Co Ltd.

NTPC said in a letter to Mahanadi Coalfields, seen by Reuters, that the 3 gigawatt Talcher Super Thermal power station was fast running out of coal because of the shutdown, threatening power supplies to many eastern and southern Indian states.

Satay said on Friday that a new contractor had taken over coal loading and other activities at two railway sidings and was using new workers, which led to violent protests by the employees of the previous contractor.

Prohibitory orders have now been imposed at the two sidings, and Mahanadi Coalfields will make use of other sidings to transport coal, Superintendent of Police Narasimha Bhola said.

"The trouble related to mining ... coal crisis, that thing is over," he said.

The later shutdown of the Talcher field, along with a hit to production from a cyclone in October, means that Coal India will find it a challenge to meet its output target of 482 million tonnes for the financial year ending March, Chairman S. Narsing Rao told reporters in New Delhi.

Coal India, which accounts for more than 80 per cent of India's coal output, produced 289.4 million tonnes from April to November, 5 percent below its target.

As a result of its inability to raise output in line with demand, India has become the third-largest importer of coal, even though it sits on what BP has estimated as the world's fifth-largest reserves. (editing by Jane Baird)