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Saturday, February 18, 2012

Global steam coal prices may zoom if CIL pushes imports

Saturday, 18 Feb 2012

ET reported that International coal prices are likely to move up further as the world's largest producer CIL needs to go on global shopping for the dry fuel to meet the increased demand of the power sector.

A Committee of Secretaries, set up by Prime Minister Manmohan Singh to sort out issues relating to the power sector, has asked CIL to sign Fuel Supply Agreements with power plants that have already been commissioned or would go on stream on or before March 31st 2015 for 20 years.

The analysts said that "It will be a Herculean task for Coal India Ltd to meet the additional obligations since its entire production now gets exhausted to feed the power sector. In the current situation, CIL's only way out is to go for procuring the raw material in countries like Indonesia, Mozambique, Australia and South Africa.”

Analyst said that "The international prices of coal are likely to go up as India's state run miner Coal India looks for procuring in the global market. The demand for coal in India is likely to go up manifold as projects go on stream.”

The international price of coal is now hovering a little over USD 100 per tonne.

(Sourced from ET)

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