Coal India ready to take on competition

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Calcutta: Public sector miner Coal India is confident of matching its private rivals on prices – once commercial mining takes off in the country.
Coal India has been fixing prices on its own for almost two decades after the complete decontrol of prices in 2000. The prices are set taking into consideration factors such as input costs, inflation and demand.
However, once the private sector is allotted blocks by the Centre for the commercial mining of the natural resource, there might be a downward pressure on prices, according to industry observers.
Coal India chairman Gopal Singh said on Friday the miner was laying stress on productivity and managing costs to match the benchmark prices of a private player.
“Once commercial coal mining starts, we will have a benchmark for coal prices. We will be prepared to match the benchmark,” Singh said.”Allowing commercial mining is an opportunity for us. We have the mines, and we have the people. We have been the market leader and will remain so,” said Singh.
The miner will focus on mechanisation and automation to improve production efficiency. “We will also manage all controllable costs,” Singh said.
Citing an example, Singh said Coal India was able to reduce cost significantly in the third quarter which led to a 10.9 per cent growth in operational profit.
The third-quarter growth is in contrast to 14.9 per cent and 25.5 per cent contractions in profit before tax in the first and second quarter, respectively.
The Cabinet Committee on Economic Affairs has already approved the methodology to auction mines for the sale of coal, under the Coal Mines (Special Provisions) Act, 2015 and the Mines and Minerals (Development and Regulation) Act, 1957.
The auction will be an ascending forward auction whereby the bid parameter will be the price offer in rupees per tonne which will be paid to the state government on the actual production of coal. There shall be no restriction on the sale and/or utilisation of coal from the coal mine

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