The higher margins on the spot sales helped Coal India book record profits this year.(File)Kolkata: Coal India will increase spot auctions of the fuel in the coming months, the chairman of the world’s biggest coal miner said on Monday, as the company’s rising output has left them with enough fuel to meet increasing demand from non-utility power plants.An increase in spot auction sales, which offer higher margins than its mainstay long-term contracts, will help Coal India to build off its record profits from this year and maintain its rising share price, which has climbed 25% since April and outpaced a 5.9% rise in the broader Nifty index.”I think in the first half, we have done a little over 30 million tonnes. In the next half, our e-auction sales may go up to 40 million tonnes,” Chairman Pramod Agrawal told Reuters in an interview at the company’s headquarters.The state-run miner, which accounts for 80% of the country’s output of the fuel, typically supplies the bulk of its output to utilities as a part of long-term contracts.However, with output growing by 16.7% this fiscal year, putting the company on track to achieve it annual production target for the first time in 16 years, Coal India was able to boost electronic spot auctions this year using the excess after honouring the long-term contracts.The higher margins on the spot sales helped Coal India book record profits this year.Agrawal said he expects power demand to grow by as much as 7% in the fiscal year ending in March, which while down from the 9.5% growth from April to November, will spur higher auction sales.”If the power demand growth remains within 5% to 7% range (in 2023-24), and we produce the targeted 770 million tonnes, auction sales will increase by another 3-4% from this year’s levels,” Pramod Agrawal said.Coal India will continue to prioritize supplies to the utilities as “that is the need of the nation,” Pramod Agrawal said, adding that the miner will look to boost supplies to long-term contract holders beyond current levels.(Except for the headline, this story has not been edited by NDTV staff and is published from a syndicated feed.)Featured Video Of The DayWhat Market Watchers Say About China Unrest And The Global Impact
Source link
Strange India 