CIL to benchmark coal on basis of gross calorific value
State-run Coal India Ltd (CIL) has announced a new system of pricing effective from January 1, 2012.
Under its new pricing system, the coal giant will benchmark coal on the basis of gross calorific value, a standard used internationally. The move will push coal prices up by 30-60 per cent from what the coal giant's average price used to be.
Among the world's major coal producers, India was the only country that was not benchmarking its product on the basis of internationally accepted gross calorific value.
Following the move, there are now seventeen slabs of 300 kcal bandwidth, starting from 2,200-7,000 kcal, and above 7,000 kcal. Previously, coal was classified on the basis of Useful Heat Value into a total of seven categories, from A to G. Useful Heat Value of coal is based on ash & moisture substance for non-coking coals.
CIL chairman & managing director N. C. Jha said, "The pricing of the present A and B grade coal would almost be the same, while E, D and C grade coal prices would increase slightly. F and G grades would almost be the same."
Speaking on the topic, Mr. Jha added that under the new pricing regime, the bands are narrower and resemble their quality more precisely.
Separately, private captive coal mining firms have expressed disappointment over the coal ministry's new policy directive which states that surplus coal produced by captive mining firms will be sold to CIL at a price not higher than the cost of production.
