Coal India surges 7% as firm hikes thermal coal prices by 9%

NEW DELHI: Shares of Coal India (CIL) rallied over 7 per cent as the company raised prices of thermal coal by an average 9 per cent. The decision was taken at a board meeting held on Monday, while revised prices are effective from today.

Following the move, the stock rose 7.69 per cent to hit a high of Rs 310 on BSE, eventually closing at Rs 304.05, up 5.63 per cent.

The move will make power generation costlier by a similar percentage. Cost of cement and fertiliser production is also expected to rise as a result.

It is estimated to fetch the company an extra revenue of Rs 6,421 crore that would cover additional outgo of about Rs 5,700 crore on account of a 20 per cent workmen salary hike announced earlier this year and a Rs 800 crore annual out go on account of wage hike of officers.

This year Coal India will earn an additional Rs 1,965 crore on account of the price hike, the company told stock exchanges.

Last month, Coal India levied evacuation charges of Rs 50 per tonne which is expected to earn the company Rs 2,500 crore annually and Rs 800 crore this year.