Tuesday, 03 Jan 2012
It is reported that the hike in coal prices from January 1 will hit the power utilities hard. The worst affected will be power units in the east as Coal India Ltd will levy 6% extra on coal from Eastern Coalfields Ltd as it is a sick subsidiary and listed with the Board for Industrial & Financial Restructuring. ECL supplies coal to both CESC and WBPDCL.
The restructuring followed an approval to the long-pending proposal by the board of directors at CIL recently. Though CIL chairman Mr NC Johan said the new mechanism would have a minimum impact on consumers, he said it would have a positive impact on company revenue.
Mr Johan said "We've ensured that no coal-producing company will lose in revenue due to the restructuring. However, if some company manages to increase the quality of coal produced, it will command a higher price for coal, adding that the new system does away with the anomalies in pricing of same grade coal produced by different collieries and subsidiaries.”
Mr Johan claimed that even after the revision, coal price would be 77% lower than the international prices for power, fertilizer and defence and 25% for others.
Power department officials expressed dismay over the decision
(sourced Timesofindia.indiatimes.com)
Showing posts with label coal price hike. Show all posts
Showing posts with label coal price hike. Show all posts
Tuesday, January 3, 2012
Windfall coming for CIL from new pricing method
Tuesday, 03 Jan 2012
Having an unenviable record of zero production growth in 2010-11 and now facing an uphill task in posting production growth this fiscal, the price rationalization move seems to have offered Coal India Ltd a clear opportunity to post a substantial profit growth in the January-March quarter.
Company officials, however maintain that the new system should keep pressure on the respective mining subsidiaries to maintain quality or risk witnessing a revenue slippage. However, considering that the company has yet to have adequate calorie metres and coal would be sold in the next three months merely by converting existing products from UHV to GCV by using available calculators, there is little doubt that CIL would witness an approximately INR 1,500 crore positive impact on the bottomline in the next quarter on account of the new mechanism
Since the company had last enhanced prices with effect from March 2011 the price benefit will be even higher for January to February.
1. End result
Even though CIL is facing an uphill task posting production growth this fiscal compared to 2010-11 and profits for the fourth quarter of this fiscal may spiral. What is more interesting worker unions are demanding a minimum wage hike of 30% under the ongoing negotiation for a five year wage pact with effect from July 1.
Rough estimates suggest that such a payout should cost CIL INR 6,000 to INR 6,500 crore annually over and above the existing employee cost. This is nearly double the company current provisioning of an estimated INR 3,000 crore annually.
Assuming that Coal India will yield to pressure from the trade unions, the new pricing exercise therefore will offer the company sufficient room to strike the wage deal without negatively impacting the bottom line.
2. Price hike?
However, if the entire price benefit is passed on to employees and it will be mandatory for the company to either enhance the production and productivity or escalate prices further to ensure profit growth in 2012-13.
Needless to mention, the company official sources are tight lipped about the emerging possibilities.
(sourced TheHinduBusinessline.com)
Having an unenviable record of zero production growth in 2010-11 and now facing an uphill task in posting production growth this fiscal, the price rationalization move seems to have offered Coal India Ltd a clear opportunity to post a substantial profit growth in the January-March quarter.
Company officials, however maintain that the new system should keep pressure on the respective mining subsidiaries to maintain quality or risk witnessing a revenue slippage. However, considering that the company has yet to have adequate calorie metres and coal would be sold in the next three months merely by converting existing products from UHV to GCV by using available calculators, there is little doubt that CIL would witness an approximately INR 1,500 crore positive impact on the bottomline in the next quarter on account of the new mechanism
Since the company had last enhanced prices with effect from March 2011 the price benefit will be even higher for January to February.
1. End result
Even though CIL is facing an uphill task posting production growth this fiscal compared to 2010-11 and profits for the fourth quarter of this fiscal may spiral. What is more interesting worker unions are demanding a minimum wage hike of 30% under the ongoing negotiation for a five year wage pact with effect from July 1.
Rough estimates suggest that such a payout should cost CIL INR 6,000 to INR 6,500 crore annually over and above the existing employee cost. This is nearly double the company current provisioning of an estimated INR 3,000 crore annually.
Assuming that Coal India will yield to pressure from the trade unions, the new pricing exercise therefore will offer the company sufficient room to strike the wage deal without negatively impacting the bottom line.
2. Price hike?
However, if the entire price benefit is passed on to employees and it will be mandatory for the company to either enhance the production and productivity or escalate prices further to ensure profit growth in 2012-13.
Needless to mention, the company official sources are tight lipped about the emerging possibilities.
(sourced TheHinduBusinessline.com)
Friday, November 18, 2011
MCL to go for 2nd price hike
Friday, Nov 18, 2011
BHUBANESWAR: As if the February hike was not enough, the Mahanadi Coalfields Limited (MCL) is seriously contemplating second hike in coal prices. And this is at a time when Odisha is passing through a power crisis triggered by acute shortage of coal.
Industries sources said MCL, a fully-owned subsidiary of Coal India Limited (CIL), is all set to go for it when the company has failed to meet the linkage coal supply as per the fuel supply agreement. MCL now proposes to increase the price of different grade of coal by about 20 per cent, the sources said.
At present, the average cost of the thermal grade linkage coal is ` 740 per tonne and the landing cost comes to about 1,200 per tonne.
While power tariff is decided by Odisha Electricity Regulatory Commission on cost plus basis as per the national electricity policy, another 20 per cent hike in the coal price will further jack up the cost of generation which will be ultimately passed on to the consumers. The domestic consumers will be the worst victim, sources in Gridco said.
‘’Unless the captive power plants (CPPs) are given adequate coal supply as per the fuel supply agreement, the CPPs will not be able to meet the� shortage scenario presently existing in the State,’’ said Sanjib Das, vice-president of the Confederation of Captive Power Plants.
MCL is able to meet 45 to 50 per cent of the guaranteed offtake of the CPPs. These plants have to meet their requirement by buying coal from MCL through e-auctioning. The price difference between linkage coal and coal provided through e-auction is huge.
The common complaint against MCL is that the coal supplied through e-auction route is much inferior quality despite the fact that the price of auction coal is more than double. Mostly coal coming from Hingula and Lingaraj mines go for e-auctioning and it contains high ash, a senior executive of an independent power producer said.
Even national PSUs like Nalco and NTPC are facing shortage of coal.
A senior executive of Nalco said power generation of the CPP at Angul suffers due to poor quality of coal.
(sourced IBNLive.in)
BHUBANESWAR: As if the February hike was not enough, the Mahanadi Coalfields Limited (MCL) is seriously contemplating second hike in coal prices. And this is at a time when Odisha is passing through a power crisis triggered by acute shortage of coal.
Industries sources said MCL, a fully-owned subsidiary of Coal India Limited (CIL), is all set to go for it when the company has failed to meet the linkage coal supply as per the fuel supply agreement. MCL now proposes to increase the price of different grade of coal by about 20 per cent, the sources said.
At present, the average cost of the thermal grade linkage coal is ` 740 per tonne and the landing cost comes to about 1,200 per tonne.
While power tariff is decided by Odisha Electricity Regulatory Commission on cost plus basis as per the national electricity policy, another 20 per cent hike in the coal price will further jack up the cost of generation which will be ultimately passed on to the consumers. The domestic consumers will be the worst victim, sources in Gridco said.
‘’Unless the captive power plants (CPPs) are given adequate coal supply as per the fuel supply agreement, the CPPs will not be able to meet the� shortage scenario presently existing in the State,’’ said Sanjib Das, vice-president of the Confederation of Captive Power Plants.
MCL is able to meet 45 to 50 per cent of the guaranteed offtake of the CPPs. These plants have to meet their requirement by buying coal from MCL through e-auctioning. The price difference between linkage coal and coal provided through e-auction is huge.
The common complaint against MCL is that the coal supplied through e-auction route is much inferior quality despite the fact that the price of auction coal is more than double. Mostly coal coming from Hingula and Lingaraj mines go for e-auctioning and it contains high ash, a senior executive of an independent power producer said.
Even national PSUs like Nalco and NTPC are facing shortage of coal.
A senior executive of Nalco said power generation of the CPP at Angul suffers due to poor quality of coal.
(sourced IBNLive.in)
Monday, February 28, 2011
Coal India: Price hike to add $1.4 bn revenue in FY12
Monday, 28 Feb, 2011, 10.10AM IST, Reuters
Coal India Ltd.
BSE 323.40 10.79% 31.50
Vol: 3051744 shares traded
NSE 324.15 10.76% 31.50
Vol: 8834689 shares traded
Coal Prices, Financials, Company Info, reports
MUMBAI: Coal India , the world's largest coal miner, said on Monday it would get 62 billion rupees ($1.4 billion) in additional revenue in the next fiscal year that begins in April after revision in coal prices, sending its shares up more than 11 percent.
The price hike will bring in additional revenue of 6.5 billion rupees in this fiscal year, the company said, adding its board had approved revision of the coal prices effective from Sunday.
The company did not mention the quantum of the price hike.
The price hike will bring in additional revenue of 6.5 billion rupees in this fiscal year, the company said, adding its board had approved revision of the coal prices effective from Sunday.
The company did not mention the quantum of the price hike.
Coal India Ltd.
BSE 323.40 10.79% 31.50
Vol: 3051744 shares traded
NSE 324.15 10.76% 31.50
Vol: 8834689 shares traded
Coal Prices, Financials, Company Info, reports
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