Even as costs jump, Coal India says consumers will not pay more

Robert Besser
04 Sep 2022, 05:39 GMT+10

Pramod Agrawal, chairman of state-owned Coal India, has announced that the company is unlikely to increase prices of coal in the near term
However, higher labor and energy costs will lead to price hikes in the coming years
As Russia's invasion of Ukraine upended traditional supply routes for power generation fuels, international coal prices have traded near record highs this year

NEW DELHI, India: Pramod Agrawal, chairman of state-owned Coal India, has announced that despite an upcoming wage hike for its workers and rising diesel and explosives costs, the company is unlikely to increase prices of coal in the near term.

However, higher labor and energy costs will lead to price hikes in the coming years, he added.

As Russia's invasion of Ukraine upended traditional supply routes for power generation fuels, such as natural gas, and as demand surged due to the relaxation of COVID-19-related restrictions, international coal prices have traded near record highs this year.

During the company's general meeting, Agrawal said, "In the prevailing circumstances, where the price of energy has increased substantially, bringing all the stakeholders on board and increasing the price becomes slightly difficult."

While some is auctioned, most of Coal India's output is sold under contract.

As the government is wary of aggressive pricing having a knock-on effect on the debt-laden electricity distribution sector, the company, which is the world's largest miner and accounts for over 80 percent of India's coal, has kept prices steady since 2018.

"But we are working on that in the coming years. We will have to increase the price because the price of diesel and the price of explosives have increased. Our input costs have increased," Agrawal said.

"I am quite hopeful that in 2024-25, mechanized evacuation will increase from today's 150 million tons to 600 million tons. That will help us in reducing the environmental load, and to increase our production and dispatch it in a more systematic manner," he added.