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Coal prices hiked 16.7 pc

Our Bureau

Kolkata , June 15

THE Chairman of Coal India Ltd (CIL), Mr Shashi Kumar, on Tuesday announced the revision of prices of all categories/ grades of coking and non-coking coal on an average by 16.7 per cent on the existing pit-head prices.

The revised prices will be effective from Tuesday midnight. The revision is being made after a gap of two years, aimed at earning an additional revenue of about Rs 1,500 per annum.

"CIL expects to end the current fiscal with a turnover of about Rs 30,000 crore against about Rs 27,000 crore in 2003-04," said Mr Kumar.

Actual increase of prices in money term would vary from one subsidiary to another even if the grade of coal were the same.

Mr Kumar said that revised prices would be communicated to consumers by CIL's seven production subsidiaries separately.

With respect to non-cocking coal, where international prices recently witnessed a spurt of 100 per cent, the CIL Chairman said that the company was proposing an increase of 20 per cent on about 65 million tonnes (mt) of prime non-coking coal, while on the remaining 207 mt of its total production of lower grade non-coking coal, the increase planed is about 15 per cent.

Prices of high-grade metallurgical grade coking coal are being increased by 50 per cent.

This grade would cover only about one mt, while the hike would be 20-30 per cent on 18 mt of other varieties of coking coal.

Even after the increase, the pit-head prices of coking coal dispatched by CIL would, on an average, be about Rs 850 per tonne.

To a question, Mr Kumar said that the resultant impact of the revision of prices would be minimum to moderate in nature in the case of thermal power generation and steel making.

The per unit cost of thermal power generation would be more by six paise after the increase, while the production cost of steel would be more by about Rs 500 a tonne.

Mr Kumar said that CIL has set a production target of 350 mt for 2006-07 from the existing production of 303 mt, which it would be able to achieve through additional capacity generation by implementing a total of 77 coal projects.

Therefore, CIL should have to have sufficient funds at its disposal for financing these projects.

An investment of about Rs 14,310 crore would be made by CIL during the 10th Plan, out of which about Rs 6,344 crore would be on new projects.

The company has also fixed an ambitious production target of 445 mt of coal per annum in 2011-12 (terminal year of the 11th Plan).

The additional 50 per cent production of its current level would be achieved by executing another 99 new projects, entailing an investment of about Rs 19,000 crore.

Mr Kumar said that even if CIL and other companies achieve their planned target in 2006-07 and 2011-12, the gap between the domestic supply and demand - as projected - would stand at 55 mt and 95 mt respectively.

This called for some demand management in order to cater to above requirement as well as to ensure better demand management by relating domestic coal prices to international levels, he said.

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