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Coal India hikes prices to protect falling margins

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Report summary

Coal India Limited announced an average 5% increase in thermal coal prices on 8 January 2018 to protect its falling margins. Prices have increased for 3,100-5,800 kcal/kg coal which constituted more than 82% of Coal India's production in 2017. This would provide short-term support to Coal India's profitability. However, it needs to improve productivity and find efficient ways to increase production from underground mines to sustain profitability in the long run. Also, this price increase will reduce the gap between the domestic coal and Indonesian low energy coal delivered to distant end users in India.

What's included

This report contains

  • Document

    Coal India hikes prices to protect falling margins

    PDF 288.97 KB

Table of contents

  • Executive summary
  • Cash margins declining each year
  • Price increase to improve Indonesian coal cost competitiveness

Tables and charts

This report includes 6 images and tables including:

Images

  • Increasing strip ratio, employee costs and contractual expenses – main drivers of increase in costs
  • Positive trend in productivity
  • but still a lot left to achieve
  • 82% of total production gets support from price increase
  • Low energy coal delivered cost comparison (US$/t)
  • Domestic & seaborne price comparison - 4200 kcal/kg (US$/t )

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