Coal India has a strong case to increase prices and it could happen “very soon”, said Pramod Agrawal, the state-owned miner’s chairman and managing director, on Monday.
The company last hiked prices in January 2018 by a little over 10 per cent. “For five years, we have absorbed all the inflation that has taken place. This year, the wage negotiation has been done. This will have an impact on Coal India’s financial conditions, especially 2-3 subsidiaries where the manpower 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 price is not hiked,” he said at the Indian Coal Markets Conference organized by mjunction.
Coal India has the power to increase prices, but all stakeholders need to be consulted before a decision. “That process is going on and I think very soon it will happen so that Coal India is adequately compensated,” he said.
“It is such a critical thing 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 charge at Coal India, said, “there were a lot of stakeholders and power ministry…we need to have a consensus. Already, we are in discussion with the ministry of coal.”
The company will this year produce 700 million tonnes (mt) of coal and the target for next year is 780 mt.
Agrawal said that an additional 80 mt for next year would be a “stiff” target, but Coal India is committed to meet the nation’s requirements. By 2025-26, it would reach the 1 billion tonne production target.
The private sector’s performance and the economy were factors that would shape Coal India’s target in 2025-26.
“If not 1 billion (tonne), I am hopeful that the requirement would be in that range because our coal is one of the cheapest in the world,” Agrawal said.
Joining the conference virtually, coal secretary Amrit Lal Meena said that this year the share of captive/commercial would be 15 per cent of total coal production of the country.
Last year, the production was 89 million tonnes and this year, it was likely to be 112 mt. “In the next 2-3 years, we are hopeful that commercial and captive mines will increase production,” said Meena. The target for 2023-24 from captive/commercial is 161 mt.
He said that the ministry was working on a strategy to enhance the production of coal so that not only the power sector but all other sectors of the economy had adequate coal and if possible think of exports.