India: NMDC's iron ore production, dispatches hit hard by workers' strike

*Employee agitation revolves around wage revision

*NMDC's rake movements drop sharply m-o-m in May'24

*Ongoing negotiations offer hope of resolution in a week's time

NMDC Limited, India's largest iron ore producer, has been facing significant disruptions in its production and dispatches due to an ongoing workers' strike which erupted in the first week of May 2024. The strike, driven by the demand for a hike in wages, has severely impacted the company's operations. Despite the ongoing second round of negotiations, a resolution seems at least a week away.

Workers' demands and negotiation stalemate

The conflict primarily revolves around wage revisions. Normally, NMDC revises wages every five years, but the latest revision, due since January 2022, has been a point of contention. Initially, the management proposed a wage increase from 9% to 12%, which was rejected by the unions that are demanding a hike of over 17%. However, recent talks indicate that the unions may have softened their stance, thereby providing a glimmer of hope for a compromise.

Impact on rake movements

The strike has also disrupted the movement of rakes, which are essential for transporting the mined ore. Under normal circumstances, NMDC operates 18-20 rakes per day. However, during the strike, this has dwindled to 7-8 rakes per day.

Monthly Dispatch Data: April vs. May 2024 (Till 21st)

The data indicates a significant reduction in dispatches from NMDC's operations. Chhattisgarh's dispatches dropped 47%, while Karnataka saw a 59% decline. Overall, total rake movements from NMDC plummeted 49% from April to May, underscoring the severity of the strike and its impact on supplies.

Path to resolution

The ongoing negotiations are crucial to resolving the impasse. With the unions showing signs of flexibility, there is cautious optimism that a middle ground can be reached. The management's revised offer of a 12% wage increase is on the table, and further discussions aim to bridge the gap between the two parties.

A settlement is nearing and we can expect a solution in the coming days.