State-owned Coal India arm Central Coalfields Ltd announced an increase in price of coking coal, which may help the PSU earn an additional revenue of nearly Rs 89.98 crore for the remainder of 2016-17 and Rs 222 crore for the next financial year.
The announcement came at a time when steel companies are feeling the squeeze because of a surge in global coking coal prices.
However, the company did not specify the quantum of the increase.
In a filing to BSE, Coal India (CIL) said: "The board of directors of Central Coalfields Ltd, a subsidiary of Coal India, has approved revision of coal prices with effect from 00:00 hours of January 14, 2017... This revision, will earn approximately additional revenue of Rs 89.98 crore for the balance period of 2016-17 i.E January 13 to March 2017 and additional revenue of Rs 222 crore for 2017-18 subject to achievement of production and dispatch target norms."
According to an official, the price of various grades of coking coal of the PSU varies between Rs 2,400 and Rs 5,050 per tonne.
"The increase in price is done by subsuming washery recovery charge (WRC), which was being charged separately in the case on non-linked washery grade coking coal, it said.
On Friday, CIL's arm BCCL raised coking coal price by about 20 per cent,which is likely to help the PSU earn an additional revenue of Rs 702 crore for the remaining part of 2016-17 and Rs 2,986 crore in 2017-18.
The decision on the same was taken at the board meeting of Bharat Coking Coal Ltd (BCCL).
"The board of directors of Bharat Coking Coal Ltd, a subsidiary of Coal India Ltd, has approved revision of coking coal prices with effectfrom 00:00hours of January 13, 2017 (of) approximately +20 per cent increase over the current price," Coal India (CIL) said in a filing to BSE.
The company further said the price of steel grade and direct feed coal has been linked to price of washed coking coal, which has been fixed on import parity price.
"Due to this revision, CIL will earn approximately an additional revenue of Rs 702 crore for the balance period of 2016-17 i.E.From January 13 to March 31, 2017, and additional revenue of Rs 2,986 crore for 2017-18 on achieving targetted production and despatch programme," the company said.
Coking coal, also known as metallurgical coal, is used for coke manufacturing, one of the key irreplaceable inputs for production of steel.
Coal India, in May last year, had raised coal prices by nearly 6.3 per cent. It accounts for over 80 per cent of the domestic coal output and has a production target of 598 million tonnes for the current fiscal.
It is eying an output of 1 billion tonnes by 2020.