CIL to restructure coal pricing from January

State-owned Coal India Ltd will restructure coal prices as it plans to switch over to the pricing based on the Gross Calorific Value (GCV) method from January.

As of now it follows fixed pricing for seven grades of coal, based on Useful Heat Value norms.

"We are moving for GCV based coal pricing from January, 2012 as directed by the Coal Ministry," CIL Chairman N C Jha said here.

Accordingly, the price of coal will be restructured but they will try to keep the new regime as revenue neutral, he said.

Coal India has started the process to ascertain the GCV of coal of all mines and buying adequate numbers of calorie measurement metres to do so.

When asked about what would happen to the coal price for the regulated sector, Jha said, "We will only announce the GCV prices and the difference between existing prices and that under the new norm would be treated as a discount or a premium to be offered or charged to customers.

"Currently there are seven grades so there are seven different fast prices. Currently these grades are wide while under the gross calorific value method, the bands would be narrower closely resembling their quality."

However, coal meant for e-auction will be sold at market determined prices.

Currently e-auctions makes for 10-12% of the total sales and comprises around 25 to 30% of the company's revenue.

After getting approval of the government to look at unlisted foreign mining companies, CIL board's foreign acquisition committee would be meeting in 10 days to study some proposals, Jha said.