Coal India Taking Advantage of 60% Rise in Global Coal Prices

Armed with a product mix of high and low energy coal, Coal India (CIL) is all set to take advantage of a 60 per cent rise in international coal prices this year and has started targeting coastal power companies’ that heavily depend on imported coal. Many coastal plants source a mix of high and low energy coal. In most cases the high energy coal is sourced from the import market while low grade coal is either sourced from CIL or from the import market.

“For companies that have supply contract with CIL, the company is ready to send them both varieties of coal from different subsidiaries of CIL like Eastern Coalfields, South Eastern Coalfields and Western Coalfields, to some extent. For companies that do not have supply contracts from us, we are offering forward and spot e-auctions from subsidiaries that offer high grade coal as well as those offer low grade coal,” he said.

With international prices rising steadily distribution companies, independent power producers with non-escalable fuel cost, merchant power producers and ports relying on imported coal for the bulk of their volumes will face volume and profitability pressures in case they do not cash in on the opportunity offered by CIL.

Read the full report @ Economic Times Energy World