CIL plans to raise the price of coal, Energy News, ET EnergyWorld

Coal India Limited (CIL) is debating raising the price of coal for the regulated sector and may soon take a call, a senior official said on Thursday. The costs are on the rise for the miner but the achievement has remained modest without revision of the price of coal for the regulated sector.

CIL chairman Pramod Agarwal on a earnings conference call said the company was in “serious discussion” about raising the price of coal and a decision could be made soon.

The world’s largest miner could see its wages rise by 5-7%, which will lead to an increase in wage costs by 2-3%, after factoring in the downsizing from 13,000 to 14,000 employees until retirement, he said.

However, these are only estimates at this time, the official said.

He said the decision to increase the price of coal has been delayed due to the start of the Covid-19 pandemic. Coal prices on the world market have increased in recent months.

CIL’s revenues remain modest due to the decline in sales and the realization of coal at electronic auctions, while its supply to the regulated sector – primarily the electricity sector – is also much smaller.

The company sells coal to the regulated sector at Rs 1,391 per tonne while the electronic auction price is Rs 1,752 per tonne.

Coal production and shipment targets for the current year remain very optimistic. The company has set a production target of 670 million tonnes and a shipping target of 740 million tonnes. In 2020-2021, its production was 596 million tonnes and the harvest was 574 million tonnes.