The unviable mines are at Satgram, Salarpur, Magma, Kunushtaria (Sodepur), Sripur and Sitarampur in the Raniganj coal belt. Ironically, the mines sit on rich coal deposits, much of which is close to the surface and is, consequently, prey to unlawful mining. ECL wants to pull out of the areas, not only because it is too strapped for funds to be able to upgrade the century-old mines, but also its accumulated flab makes operations unviable there.

ECL, which has been bailed out twice by the Board for Industrial and Financial Reconstruction (BIFR), makes an annual loss of Rs 450 crore from the six uneconomic mining areas. Eastern Coalfields' accumulated losses are Rs 1728.6 crore. It made a loss of Rs 541.89 crore last year and became eligible to be referred to the board for sick companiesagain. The company was first referred to the BIFR in November 1995, when it eroded half of its net worth.

Coal India rescued its subsidiary by effecting a financial re-engineering, involving conversion of Rs 994 crore of loans into equity, which inflated ECL's Rs 1,039-crore share capital. The equity injection improved the company's net worth and kept it from turning technically sick.

This year, Coal India's profit projections to the BIFR has kept the board from declaring Eastern Coalfields sick once again. The Industrial Credit and Investment Corporation of India has since, begun preparing a complete turnaround package for the company.

Industry sources feel that without a recast, Coal India's producer of prime coal could post a loss again at the end of this fiscal. Shutting down mines at the six identified areas could bring down ECL's losses by Rs 300 crore a year.

The biggest burden on the company's is its surplus work force. Eastern Coalfields produces only 27 million tonnes of coal, with amanpower of 1.53 lakh people.

It is the largest employer within the Coal India family, which in itself has a mind-boggling work force of 6.11 lakh for a company that produces 260 million tonnes of coal a year. Industry sources say altogether 71,000 people are employed in Eastern Coalfields' six loss-making mining areas, of which at least 10,000 are practically idle.

The 10,000 women at the six areas who were once responsible for manual payloading, have become redundant with coal transportation getting mechanised. The public-sector enterprise maintains schools, hospitals and housing for its huge work force, which is a drain on its limited resources.

The company suspects that much of the redundant work force is also responsible for illegal mining. The irony of the so-called unworkable mines in the Raniganj belt, is that they sit on rich deposits of coal, much of which is close to the surface and can be unearthed through crude mining methods. The six mining zones are unviable for Eastern Coalfields becausethey require investments, which the company is not in a position to make.

For pilferers, without qualms about safe or scientific mining methods, the black diamond is accessible through a pick axe and a shovel.

Eastern Coalfields had to stop mining at similar deposits at Tara East and Tara West in 1994-95. The deposits have now been offered to a joint venture between West Bengal State Electricity Board and Eastern Minerals Trading Associates, called Bengal Emta and the mines are known to be making a profit. A Supreme Court judgment has interpreted retrenchment as a provision of the Industrial Disputes Act, provided compensations are paid to the laid-off employees. Eastern Coalfields has to pay Rs 1,600 crore as compensation if its wishes to part with its excess work force of 40,000 people.