Market-driven coal prices soon

Uniform price for core, non-core sectors; 10 mn tonnes to be sold at e-auction

The government today hinted at major changes in coal prices and said it would be moving towards market-determined prices for the fuel. The coal ministry will also be pushing for uniform pricing for both core and non-core consumers.

"We are moving towards market-determined prices of coal in the next two-three years," said Coal Secretary PC Parakh. As a first step, the government has already granted permission to coal companies to auction coal to non-core consumers and traders every week.

Parakh said 10 million tonnes of coal would be sold through this route during the current financial year.

"The implementation of the electronic auction system will regularise coal prices and will check black-marketing in coal by providing legal access to a large number of consumers, particularly in the non-core sector," said Dasari Narayana Rao, minister of state for coal and mines, at a press conference here today.

Though a final decision would be taken based on these trial runs, the move was likely to sort out the problem of coal shortage in the non-core sector without affecting supply to the core sector, he added. Core consumers comprise the power, cement and steel sectors.

Dispelling the notion that there was a problem with coal supply, particularly to the power sector, he said, "Supplies to the power sector have been more than the targets of the past few years. During 2000-01 to 2004-05, coal supplies to the power sector have been 41 million tonnes more than the annual targets."

He said a few power stations had a critical level of stocks for reasons like infrastructure constraints, non-payment of dues and deliberate maintenance of lower stocks. Power stations owed Rs 3,326 crore to Coal India till January 2005.

Parakh said India had been importing 21-23 million tonnes of coal annually and an additional import of 10 million tonnes had been targeted for this year.

Among measures to meet the growing need of energy, 35 captive coal blocks have been allocated with total coal reserves of 6,162 million tonnes to power, cement and steel units against 49 blocks allocated with total reserves of 5099 million tonnes since the introduction of captive mining in 1993.

The government is also likely to clear two more projects with a capacity of 23 million tonnes annually at a capital investment of Rs 2,151 crore by the month-end.

It has already cleared three major projects with an annual production target of 23.50 million tonnes and a capital investment of Rs 735 crore.

Production & pricing

---

• 323.64 million tonnes of coal produced against a target of 314 million tonnes
• 77% of CIL production routed to power plants
• Coal prices are to be deregulated and in 2 to 3 years market will determine prices