Coal India shares dip 3% as competition from private miners looms

Lead time for mine development, challenges in commercial mining are issues NTPC and private miners will have to overcome

Even as there were concerns on Coal India (CIL) facing competition from private merchant miners, NTPC’s announcement about forming a subsidiary to undertake coal mining business has compounded CIL’s woes. Shares of CIL, which have lost more than a third since June, fell 2.3 per cent on Friday.

CIL supplies a majority of its produce to the power sector, with NTPC being its key customer. If NTPC develops its own mines, CIL would face the risk of losing business worth over 100 million tonnes (mt), given its coal supplies to India’s largest power generator. 

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