Coal Quality and Pricing in India

Rahul Kumar Ojha | 16JE002384

Department Of Mining Engineering
Indian Institute of Technology (ISM), Dhanbad
 Layout of the presentation
Introduction
Variety / Classification of Coal in India
Coal Quality in India
Coal Pricing
Reduction in imports
GST Impact
Conclusion
 Coal
Flammable black hard rock used as solid fossil
two- thirds of total used in producing electricity
India Ministry of Coal estimates :
o proved coal reserves in country = 125.9 BT
o Estimated coal resources = 311 BT
 Ranking of Coal in India

Coal
% of carbon

Anthracite Bituminous Lignite Peat

> 85 % 50 - 85% 35 - 50 % < 35%
Another basis of classification
 QUALITY OF COAL IN INDIA
Low energy content.
High ash (30-50%) and low S content.
Production of noxious fumes.
Washed to reduce impurities and improve coal quality.
As per Colliery Control Rule 2004, CCO regulates classification/grading
of coal.
Basis for grading are:
Non-coking - GCV(Gross Calorific Value)
Coking Coal - ash %
Semi coking & weakly coking coal - ash and moisture %
 Coal Pricing in India
Ministry of Coal + CIL, SCCL decides price
New pricing regime/International pricing
Benchmarking coal on GCV
Floor pricing : 20 % higher than notified price
at least 17 slabs of 300 kcal bandwidth (2200 kcal - 7000 kcal or
above)
Narrower bandwidth of energy content
Tried from 1990
 Coal Pricing in India
Earlier UHV being followed (since 1970s)
Indian Coal classified into 7 grades
Based on ash and moisture content for non coking coals
Floor pricing : 30 % higher
UHV in kcal/kg = (8900 - 138 [ % ash content + % moisture
content]); derived by CFRI.
This declining trend is expected to continue.
 GST IMPACT
Coal taxable at 5% under new GST regime.

Excise duty, SED, VAT, CST & levies subsumed under GST of 5%.

Effective coal prices (notified price + taxes) reduced by 2-3% for power
sector consumers.
References
Shine Jacob, January 21, 2013 , CIL shifts to new coal pricing method
http://www.businessstandard.com/article/companies/cil-shiftsto-new-coal-pricing-
method112010200108_1.html
Pallavi Pengonda, September 11, 2017, Coal prices set to lose their spark
http://www.livemint.com/Money/ItbQfIvdc2 lvkWy0l0yEyI/Coal-prices-set-to-lose-
theirspark.html
India Ministry of Coal, accessed July 2016 http://coal.nic.in/content/coal-reserves
Anil Bose, September 21, 2013, Classification of Coal in India
https://www.importantindia.com/4603/classification-of-coal-in-india/
Money Control : Coal India,
http://www.moneycontrol.com/stockcharts/coalindia/charts/CI11#CI11