Coal India Chairman today said that amid a slowdown in growth in the mining sector, there is a "strong case" to revise coal prices and a hike in prices could take place "very soon".
Addressing a gathering of stakeholders from the coal industry, Coal India Chairman Pramod Agarwal said, "To my understanding, perhaps the kind of growth we have seen in the last year, is not going to come in the next year. Even if it comes in the next year, it will not be on a sustainable basis."
Pramod Agarwal was speaking at the Indian Coal Markets Conference organized by Mjunction, a B2B sales and procurement firm.
He said there is a "strong case" to hike coal prices, and the revision in prices could happen "very soon" as discussions are underway with different stakeholders.
Coal India Limited (CIL), a state-owned mining firm, is the single largest coal producer in the world. Coal India contributes to 85 per cent of total domestic coal production and is responsible for 55 per cent of total power generation in the country. The firm also meets 40 per cent of the primary commercial energy requirements of the country.
"There is a strong case for increasing coal prices, as that has not happened in the last five-odd years. This year, the wage negotiation has taken place as well, which will have an impact on CIL's financial condition, especially for a few subsidiaries where the manpower cost is very high," Mr Agarwal said.
"There will be a lot of problems if prices are not hiked. Discussions are underway with stakeholders...It will happen very soon," he added.
Mr Agarwal reiterated that the state-run mining firm will achieve its production target of 1 billion tonnes by 2025-26. He added that increased accessibility will lead to increased energy consumption. "Coal will not see any decline in its consumption or role," he noted in his speech.
Vinaya Varma, MD & CEO of Mjunction Services Limited said, "This is a stiff target as it would require 80 million tons more coal, over 700 million tons expected in FY23."
"In India, coal is critical for energy security and independence amid geo-political risks related to gas and oil supplies. So, until the energy transition process starts playing out in full, coal will continue to stay much in demand as the most dependable and economical source of energy for India," he said.