Coal India surges non-coking coal prices by 8%

1 Jun 2023 , 11:32 AM

Coal India Limited has announced an increase in prices of non-coking coal of grade G2 to G10 by 8% from existing prices. The price increase will be effective from May 31 and comes five years after the last hike.

Generally, these high-grade coals are utilized by the fertilizer, cement, and sponge iron sectors. Therefore, the increase in prices of such coals is likely to cause a surge in input costs for these companies.

However, there will be no impact on the thermal power sector since it mainly uses coal of G11-G13 grade for electricity generation.

India’s largest power producer NTPC Limited utilizes coal of G11-G13 grade in more than 90% of its power generation, stated the sources.

This price surge will generate incremental revenue for Coal India. The company estimates an additional Revenue of Rs 2,703 crore in FY24.

The company also highlighted that the price increase was long due. For the past five years, company has absorbed the inflationary costs without revising prices.

This revision was necessary as some subsidiaries of Coal India may not be able to fund their future projects in the absence of adequate compensation.

Coal India is trading about 5% lower in today’s trade as its two-day offer for sale is going on.

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