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Price hike will not affect Coal India's MoU customers

10 Mar 2011 Evaluate

The consumers of Coal India Ltd (CIL) procuring A and B grade Ranigunj variety of thermal coal at negotiated price — MoUs may be least affected in this season of coal price hike. Ranigunj coal is produced by Eastern Coalfields Ltd, a wholly owned subsidiary of CIL.The major buyers through this route are: power utilities like NTPC, CESC, Durgapur Projects Ltd (DPL), DVC and West Bengal Power Development Corporation Ltd. Steel Major SAIL also procures 2 lakh tonne of such coal annually.

The India coal major sells anything between 5.5 to 7 million tonne of such high quality coal (of heat value exceeding 5600 kcal a kg) through annual contracts at import-linked prices to meet the requirements over and above the quantities agreed in the fuel supply agreements (FSA). The decision on the pricing mechanism for the future MoUs is expected to be taken during the March 28 board meet of ECL.

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