India: CIL Revise ROM Price of Non-Coking Coal

Coal India Ltd (CIL) has updated ROM (Run-of-Mine) base price of Non-Coking coal produced across all the 8 coal-producing subsidiaries including North Eastern Coalfields Ltd (NECL).

The revised ROM prices for all the coal grades shall be effective from 9 Jan’18. It is the first time over the year that CIL has revised the base price of coal, with the previous price correction being implemented on 29 May’16.

The domestic coal in India is categorized into G1 to G17 based on the corresponding calorific values of the coal. The calorific value of coal decreases as we move down from G1 to G17, accordingly, G1 has the highest calorific value(ranging 7000 Kcal/kg and above), while G17 coal has the lowest calorific value ranging between 2200-2500 Kcal/kg.

While observing the updated coal price, CoalMint has learnt that ROM prices of higher coal grades (G2,G3, G5) and extreme lower coal grades (G15, G16, G17) have been reduced from the previous term, whereas ROM prices of the remaining coal grades having calorific value ranging between 3100-5800 Kcal/Kg has been increased.

Base Price of G4 grade of coal has been kept constant at INR 3000/MT. Price of highest grade G1 (calorific value exceeding 7000 Kcal/kg) is not fixed, albeit has been charged INR 100/MT extra over and above the fixed coast of G2 grade coal, for increase in GCV (Gross Calorific Value) by every 100 Kcal/kg or part thereof.

The talks of increment in base coal price were going on ever since CIL had made the provision of INR 2300 Crore towards wage settlement in employee costs. The current price revision is suspected as a step taken by CIL to combat the loss incurred in wage settlement.

The ROM price of Non-Coking coal Applicable for the 7 subsidiaries of CIL (SECL, MCL, CCL, NCL, ECL, BCCL and NECL) except WCL has been listed below:

ROM Coal Price of NON-Coking Coal Applicable for CIL Subsidiaries (except WCL)

Source: CIL
GCV in KCal/kg
Price in INR/MT

CIL charges additional amount of INR 450/MT over and above the notified price in respect to the coal produced from Rajmahal mine of Western Coalfield Ltd (WCL). The Pit Head ROM coal price of WCL is provided below:

ROM Coal Prices Applicable for WCL

Source: CIL
GCV in KCal/kg
Prices in INR/MT

The elements of other charges in coal price have been kept unchanged by CIL. Accordingly, Slack coal would be charged INR 30/MT extra on ROM coal, whereas Steam coal would be charges INR 270/MT extra on the basic ROM coal prices.

The current alteration in ROM coal prices is likely to make power generation costlier, which in turn would affect the production cost of the associated industries.