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.
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 "If the power demand growth remains within 5% to 7% range , and we produce the targeted 770 million tonnes, auction sales will increase by another 3-4% from this year's levels," Agrawal said.
The miner helped shield Indian utilities and other coal users from the shock of record high global prices, and total imports were lower than initially projected as Coal India crucially ramped up production at a time power demand shot up to a record this year.While a rapid surge in power demand was triggered by an uptick in economic activity and an intense heatwave during the first quarter of this year, in recent months electricity use has surged due to higher industrial activity, Agrawal said.
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