CIL’s revenue from rate hike to go to pension fund

By: |
November 25, 2020 3:15 AM

PSU miner Coal India (CIL) will increase prices of thermal coal for both regulated and non-regulated sectors across grades by Rs 10 per tonne effective from December 1.

CIL’s e-auction sales at 16.8 million tonne (mt) in October was up 190% compared to 5.8 mt booked during October last fiscal.The company has targeted to produce 660 million tonne in FY21.

PSU miner Coal India (CIL) will increase prices of thermal coal for both regulated and non-regulated sectors across grades by Rs 10 per tonne effective from December 1. This may work to a less than 1% increase in the non-coking coal prices on the weighted average price per tonne. The company has informed the exchanges that the entire additional revenue generated for the price increase will go to the corpus of the Coal Mines Pension Scheme, 1998, benefitting the pension holders. It is not meant to impact the company’s bottom line, the company sources said.

Of CIL’s total coal production, 92.3% was non-coking or thermal coal and the rest was coking coal last fiscal. The company has targeted to produce 660 million tonne in FY21. During April to October, it has produced 283 MT. To achieve its target, the company will have to produce another 377 MT in five months, which is quite achievable considering a compounded monthly growth of 5%.

Considering 92.3% of its total coal production to be thermal coal this fiscsal, CIL, in order to achieve its target, will have to produce around 348 MT of thermal coal in the next five months. This will fetch the company an estimated additional revenue of `278 crore due to the price increase for the remaining four months of the fiscal, beginning December.

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