Coal India Ltd is planning to increase the prices of coal slowly after considering the views of all stakeholders, the state-run miner’s chairman said on Wednesday, as Asian coal prices hit all-time highs.
Asian coal prices from exporters Australia and Indonesia, and the most-traded thermal coal futures contract on China’s Zhengzhou Commodity Exchange touched record highs recently due to robust power consumption.
“We cannot increase the price of coal abruptly. It can only be increased slowly, and that we are planning (to do),” Coal India Chairman Pramod Agrawal told shareholders at the company’s annual general meeting.
The world’s largest coal miner, which accounts for over 80 per cent of India’s output of the fuel, last raised coal prices in 2018, and is generally not aggressive with pricing.
“Coal India is planning to increase the price but taking the views of all the stakeholders and getting them on board is essential before we take a decision, because it affects the price of the energy in the country,” Agrawal said.
The company’s stock has surged by over 20 per cent in over three weeks to a three-month high on Wednesday, bouyed by a step up in production due to a surge in demand for coal-fired electricity as coronavirus-related curbs are eased across India.
In reply to a question by a shareholder about the possibility of a demerger of Coal India subsidiaries, Agrawal said there was no such plan.
“There is no such thinking even in the government, that some of the subsidies may get demerged from Coal India,” he said.
Agrawal also said that the company preferred giving dividends over share buybacks because buybacks attracted double the taxes, as both Coal India and its units were taxed.
“We are requesting the government to change that mechanism, and if that is changed, perhaps we can go for buyback as well,” he said.