Friday, June 24, 2022

Increase in coal price is inevitable, says Coal India Chairman

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  • ‘Everybody understands that we have reached to a point where the coal price increase has become inevitable’
  • ‘We have not stopped e-auction to other modes. We had reduced during October’

New Delhi: Coal India Ltd (CIL) Chairman Pramod Agrawal has said that increase in coal price is inevitable even as he has assured that it will be done only after taking all stakeholders onboard. In a recent investors’ call conference, Agrawal said that the price rise has been long overdue but it was deferred keeping in view the crisis pertaining to the availability of coal in the country. “In October because of the crisis everybody was shaky, but let me add to one point that coal price increase is something where we have to bring all the stakeholders on board. That process is on and everybody understands that we have reached to a point where the coal price increase has become inevitable. I am quite sure that it should come very soon, but when will it come? It is very difficult for me to say,” the Coal India CMD told investors.

‘E-auction allocation will depend on coal stock situation in power sector’

Responding to questions over Coal India’s plan for allocation of coal under e-auction window, which has gone down due to the coal crisis facing the power sector, the CIL Chairman said, “I think we will be able to sell off about 40 million to 50 million tons in this e-auction this year, but that will depend how the whole situation in the thermal power stations are. If the power demand increases tremendously and we have to face that situation, then perhaps this figure we will have to reduce.” Agrawal said that while overall coal supplies have been higher in comparison to the previous financial year, most of the increased supply went to power houses because there was an urgent situation where Coal India was required to increase the stocks in power houses.

“We have not stopped e-auction to other modes. We had reduced during October. Actually this year, till now, we have auctioned about total quantity booked is 70 million ton, which is almost of the same, which was done during this period last year also. So we have not stopped it, but the extra supplies that we were done about 59 million ton or 56 million ton of extra coal that was supplied, it has gone mainly to powerhouses, that is the point I was trying to make,” Agrawal told investors. He added that currently, on an average Coal India is dispatching 1.9 million tonnes (MTs) of coal everyday, out of which 1.65 MTs is going to the power sector.

1-BT coal production target moved to 2024-25: Coal India Chairman

The Coal India Chairman told the investors that the company has advanced the target for reaching 1 Billion Tonne (BT) coal production from 2023-24 to 2024-25. “Earlier we were planning for 2023 to 2024, but that seems to be completely unreasonable, we are targeting for 2024 to 2025, but it will depend largely on how the demand scenario pans out. We cannot produce coal and keep it. So last year we produced by 576 million but we ended the year with a stock of 100 million ton. This year we are thinking that we will be producing something in range of 640 million ton. Let us see what is the stock position. If the stock position is not good, definitely the next year, the production will increase, but 1 billion ton, we are targeting for 2024, 2025 depending on the demand in the country,” said Agrawal.

‘Coal India substituted almost 50% coal imports during crisis’

Responding to a question on catering to demand during the recent coal crisis from industries and power plants who had been dependent on imported coal, Agrawal said that Coal India was able to substitute around 50 percent coal imports. “We have been able to replace almost 50 percent, I am told. About 45 percent have reduced compared to last year. Last year, again also the import was less compared to the year before, but this year we have reduced substantially. Secondly, what has happened because of the high price of the coal in the international market, the power plants located on the coastal areas, which are based on very high GCV coals, they have reduced their production of energy substantially. There too, we are supplying our coal and the domestic coal-based power plants are now generating energy to fulfill the gap. So to that extent also, something has been replaced,” said Agrawal.

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