Coal IndiaLtd. produced 35.24 million tonnes and shipped 37.74 million tonnesof coal in September, falling 5.2% and 6.6% year on year, respectively, as demandfrom the power sector remains weak, effectively creating a glut in the country,Bloomberg News reported Oct. 3.

The world's largest coal miner missed targets for the monthof September and had its plans to increase production curtailed by minimal demandfrom power plants, a situation that has affected the company's profitabilityand its ability to give its employees the agreed upon salary increase, thereport said.

Coal India is in discussions with labor unions to revisewages for a five-year period starting July 1, Bloomberg News reported.

"It looks like a difficult situation for Coal India andif this situation continues, we could see a contraction in their profitmargins," the report quoted Mumbai-based analyst Goutam Chakraborty atEmkay Global Financial Services, as saying, with regards to the wage costs."We continue to be optimistic that the demand should return, but it alldepends on the power sector."