Coal India has a strong case for raising prices and it could happen “very soon,” Pramod Agrawal, president and managing director of the state miner, said on Monday.
The company last raised prices in January 2018 by just over 10 percent. “For five years we have absorbed all the inflation that has occurred. This year the salary negotiation has been made. This will have an impact on Coal India financial conditions especially 2-3 subsidiaries where labor cost is very high like ECL (Eastern Coalfields Limited), WCL (Western Coalfields Limited), BCCL (Bharat Coking Coalfields Limited).
There will be a lot of problems if the price is not raised,” he said in the Indian market. Coal Market day organized by mjunction.
Indian Coal has the power to raise prices, but all interested parties must be consulted before a decision is made. “That process is underway and I think it will happen very soon so that Indian Coal is adequately compensated,” he said.
“It is something so critical for the economic development of the country that it cannot be increased unilaterally.”
Asked when a decision is likely, B Veera Reddy, Director (Technical) and Director (Finance)-additional position at Coal India, said: “There were a lot of stakeholders and the energy ministry…we need to have a consensus. We are already in talks with the Ministry of Coal”.
The company will produce 700 million tons (mt) of coal this year and the target for next year is 780 mt.
Agrawal said an additional 80 mt for next year would be a “hard” target, but Coal India is committed to meeting the nation’s requirements. By 2025-26, it would reach the production target of one billion tons.
The performance of the private sector and the economy were factors that would shape Coal India’s target in 2025-26.
“If it’s not a billion (tonnes), I’m hopeful the requirement is in that range because our coal is some of the cheapest in the world,” Agrawal said.
Joining the conference virtually, Coal Secretary Amrit Lal Meena said that this year the captive/commercial share would be 15 percent of the country’s total coal output.
Last year production was 89mt and this year it will probably be 112mt. “In the next 2-3 years, we are hopeful that commercial and captive mines will increase production,” Meena said. The 2023-24 captive/commercial target is 161 mt.
He said the ministry was working on a strategy to improve coal production so that not only the power sector but all other sectors of the economy would have enough coal and, if possible, think about exports.
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