CIL approves 8% thermal coal hike, targets revenue of Rs 27 billion

The Board of Directors of Coal India (CIL) has approved an 8% price hike for high-grade thermal coal, grades G2 to G10, effective May 31, 2023. This price increase will apply to all subsidiaries of CIL, including NEC, for both regulated and non-regulated sectors. CIL expects to generate approximately Rs 27 billion in incremental revenue for the remaining period of the financial year 2023-24. Pramod Agrawal, CMD of CIL, had previously indicated plans for a coal price hike in an interview. CIL's last price revision was in January 2018, and since then, the company has absorbed rising costs without adjusting its prices. Agrawal highlighted the need for adequate compensation to support the financial viability of CIL's arms, particularly Eastern and Western Coalfields Ltd and Bharat Coking Coal, as they face financial challenges and require funding for future projects. To meet ambitious production and off-take targets, CIL emphasises the importance of having sufficient capital for mining and rail evacuation projects. While recognising the argument for price revision, CIL intends to adopt a balanced approach, considering the potential impact on various commodities. The objective is to safeguard CIL's EBITDA and minimise the impact on the nation. The increase in coal prices comes at a time when India is experiencing record-high electricity demand, reaching 220 GW on May 16. The price hike is expected to have an impact on coal prices, which will influence the overall energy landscape.