Coal India seeks price hike to boost subsidiary earnings

State-owned Coal India Limited (CIL) has sought an immediate increase in the coal prices by 10% to prevent its subsidiaries Eastern Coalfields Limited (ECL) and Bharat Coking Coal Limited (BCCL) from slipping into red.

The issue was flagged off at a recent meeting in the coal ministry to review the country's coal production during the first five months of the current fiscal-April to August 2007. It was pointed out that India's actual coal production during the period April-August 2007 stood at 158.57 million tones as against a target of 172.25 million tones, indicating a shortfall of 13.68 million tones. The meeting was chaired by the minister of state for coal.

Sources revealed that four out of the various subsidiaries of CIL including ECL, Western Coal fields Ltd (WCL), Mahanadi Coalfield (MCL) and North-Eastern Coalfields (NEC) have registered a negative growth during April-August this year as compared to the corresponding period of the previous year.

On its part, BCCL has seen a marginal growth in coal production of 0.52% during the period. The overall production of CIL during the period was 139.19 million tones against a target of 142.76 million tones, an achievement of 92.6% of the target.

However, on the coal-offtake front, ECL and BCCL have registered a negative growth of 13% and 0.02% respectively during the period April to August. The overall achievement of CIL has been 148.72 million tones, which is 98.6% of the target of 150.81 million tones.

CIL is also much behind its capital expenditure targets set for the period under review. As against a target of Rs 758.93 crore, the overall capex of CIL stood at Rs 485.7 crore in the first five months of 2007-08. Excepting Northern Coalfields (NCL) and South Eastern Coalfields (SECL), all other subsidiary companies of CIL have suffered a negative growth in capital expenditure.