Biggest coal miner sees profits fall as fuel extends decline
Coal India, the world’s largest miner of the fuel, reported a 10% drop in first-quarter profit on waning prices and following a sharp hike in staffing costs.
Net income for the three months through June fell to 79.4-billion rupees ($959-million) from a record a year earlier, the company said Tuesday. Profit was higher than a 75.5-billion rupees average of estimates compiled by Bloomberg.
Production across the coal sector has largely kept pace with rising demand, meaning there have been fewer opportunities to charge premium prices at auctions for short-term or uncontracted cargoes.
The Kolkata-based producer has been allocating vast amounts of capital to expand its output and respond to India’s demand to prevent disruptions and curb reliance on imported fuel. Though Prime Minister Narendra Modi’s government is championing a huge rollout of cleaner energy sources, coal continues to generate about three-quarters of electricity and will likely still account for more than half by the end of the decade.
Coal India in May made the first increase in five years to prices of some grades of products, in an attempt to offset a hike in its nearly $6-billion annual wage bill following lengthy negotiations with labor unions.
The company shipped 187-million tons of coal during the quarter, about a 5% increase on the same period in 2022. Production rose almost 10% to 176 million tons. The company earned an average 1 769 rupees a ton on sales during the period, a 3.3% decline caused by lower realizations in auction sales.
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