Mr S Narsing Rao CMD of India’s second largest coal producer Singareni Collieries Company Limited plans to revise coal prices upward during this quarter to offset the rise in cost of production. Mr Rao told that “We are likely to revise the prices. However, the quantum of increase will be decided shortly.”

Mr Rao said that the state owned coal miner did not increase coal prices in the recent times despite an increase in the average cost of production, which is around INR 1,451 per tonne during 2010 to 2011 as compared with INR 1,384.7 per tonne during 2009 to 2010.

He said that “Labour wage has increased 21% in 2010 to 2011 due to inflation. Normally, the labour wage increases by 8% to 10% in a year.”

Mr Rao said that the coal demand was estimated at 58 million tonnes during 2010-11, 6 million tonnes more than 52 million tonnes coal that SCCL produced. The consumers meet the deficit by importing the coal or from buying from other mines. In addition, there is pending demand from the industries to the tune of 16 million tonnes of coal.

Mr Rao said that “This demand cannot be met in the near future as there cannot be any incremental production. Our production will go up in some mines but simultaneously some old mines will be closed ensuring that the net capacity addition is minimum.”

SCCL had levied a 30% premium on A, B and C grades of coal. The premium levied is between INR 224.96 and INR 674.86 per tonnes over the basic price depending on the quality and the distance from the customers.

CIL has already hiked the coal prices last month for its non-power customers. CIL increased the price of A and B grade coal by 154% and 162 % respectively. However, prices of other grades of coal were revised upwardly by 30%.

(Sourced from www.mydigitalfc.com)