CIL to earn additional revenue of Rs 4,467 cr from price hike

NEW DELHI: The government on Wednesday said Coal India Ltd will earn Rs 4,467 crore in additional revenue this fiscal on account of the price hike effected last year by the coal miner for various coal grades.

"Based on the production and offtake target of 2011-12, additional revenue likely to be generated per annum due to revision of price is around Rs 4,467 crore," Coal Minister Sriprakash Jaiswal informed the Lok Sabha in a written reply to a query.

Last year, the world's largest coal producer, Coal India Ltd (CIL), hiked the price of coal by 11 per cent on average. As a result, the price of CIL's coal now hovers in the range of Rs 448-2,500 per tonne.

"The main reasons for the price hike were wage revision of all employees of CIL and its subsidiary coal companies and also the step increase in cost of inputs," he said. CIL may resort to another price hike next year to partly offset the pressure of a forthcoming wage revision due in 2011.

"The surplus generated in the process (of price increase) would be used for fresh investments in new projects, which would lead to an increase in coal production," Jaiswal said.

Coal India meets over 82 per cent of the country's coal demand. However, the country still has to import coal to match the demand-supply gap, which stands at about 80 million tonnes at present.

CIL produced about 431.5 million tonnes of coal last fiscal and is targeting at an output of 461.5 million tonnes in 2010-11. CIL has already outlined a Rs 6,000 crore plan to augment its resource base by acquiring overseas assets to meet rising demand from the power sector.

In response to a separate query, Jaiswal said around 19 million tonnes of coal has been imported into India in the current financial year. Last year, over 73 million tonnes of coal was imported.