These high grade coals are used mainly by the cement, fertiliser, and sponge iron sectors and the development will increase their input costs. It is unlikely to affect the thermal power sector that mainly uses coal of G11-13 grade to generate electricity.
For instance, the country’s largest power producer NTPC Ltd uses G11-13 grade for more than 90% of its power generation, said an official who did not wish to be named.
Coal of grade G8-G9 can be used for blending in some plants when required, he added.
The price revision will help Coal India earn incremental revenue of approximately ₹2,703 crore in FY24, the state-run company said in an exchange filing on Tuesday.
The increase in coal prices was pending for a long time for multiple reasons.”The company has absorbed inflationary costs for over the past five years without any revision in prices. Some of CIL’s subsidiaries may not be able to finance their future projects as they feel the pinch in the absence of adequate compensation,” a Coal India official had told ET in April.”There is a sound reason for price revision. But we need to consider the impact of it on various other commodities,” the person had said.
The company’s production and off-take for FY24 is targeted at 780 million tonnes. Of this, 610 million tonnes are programmed to meet the power sector’s demand.
The current notified price of coal for grades G2-G10 for all sectors is in the range of ₹1,228-3,288 per tonne on ‘pithead run-of-mine’ basis.
