Coal In­dia Cuts Prices on Global Cues

Slashes prices of top-grade coal by up to 40% due to more-than-ad­e­quate pro­duc­tion and stock pile of 58 mt

The Economic Times - - Economy -

De­b­joy Sengupta

Kolkata: Coal In­dia has cut prices of top grades of coal by up to 40% on the back of more than ad­e­quate coal pro­duc­tion as well as about 58 mil­lion tonnes of stock pile.

The coal be­he­moth’s de­ci­sion to cut prices of high energy con­tent coal that com­petes di­rectly with im­ported coal by 1040% for both power pro­duc­ers and non-power pro­duc­ers for the first time in three years fol­lows a global price crash of the com­mod­ity.

“Fol­low­ing a rapid fall in in­ter­na­tional coal prices and a stock­pile at pit heads, high energy coal pro­duced mainly from East­ern Coal­fields, South East­ern Coal­fields and North East­ern Coal­fields have been slashed for vol­umes sup­plied over 90%,” a se­nior Coal In­dia of­fi­cial said on Mon­day.

A se­nior power sec­tor of­fi­cial said, “We have been told that the price cut of­fer will re­main valid for the en­tire fi­nan­cial 2016-17 and it is be­ing in­tro­duced on an ex­per­i­men­tal ba­sis fol­low­ing a large stock pile and a mas­sive fall in global prices.”

Ac­cord­ing to fuel sup­ply agree­ments signed by Coal In­dia with its con­sumers, the coal com­pany was to charge a 10% pre­mium over its no­ti­fied price for more than 90% of con­tracted quan­tity of coal sup­plied in a year. If the coal sup­plied was be­tween 95% and 100% the pre­mium was to be 20%. Any coal sup­plied over 100% of the con­tracted vol­ume was to be charged 40% over the base price. “We have now de­cided to waive the pre­mi­ums charged for sup­ply­ing ad­di­tional coal over 90% of con­tracted sup­ply vol­ume,” said the Coal In­dia of­fi­cial quoted ear­lier. “Thus the con­sumers get a 10% dis­count for re­ceiv­ing be­tween 90% and 95% of the con­tracted vol­ume. The dis­count would be 20% for vol­umes be­tween 95% and100% of the con­tracted vol­ume and 40% for vol­umes be­yond 100%,” the of­fi­cial added.

Coal In­dia of­fi­cials said that if the move prompts its con­sumer to lift more coal, then the com­pany may even con­sider in­tro­duc­ing dis­counts for cheaper cat­e­gory of coal used by power com­pa­nies.

At present, Coal In­dia has a to­tal stock of 58 mt while another 39 mt of coal is piled up at the power plants. Coal In­dia cuts prices of high energy con­tent coal by

At present, Coal In­dia has a stock of 58 mt while another 39 mt coal is piled up at power plants

Cut is for both power pro­duc­ers and non­power pro­duc­ers

Prices slashed for coal pro­duced from East­ern Coal­fields, South East­ern Coal­fields and North East­ern Coal­fields for vol­umes sup­plied over 90%

Price cut of­fer to re­main valid for the en­tire fi­nan­cial 2016-17

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