Coal news and updates

Morgan Stanley says India’s move to allow private firms to mine coal for commercial use to be positive for the country's coal production.

 

The Government will auction coal blocks to private companies, Coal Minister Piyush Goyal had said on Tuesday, a move that would end restrictions on the sale and use of the fuel after more than four decades and end Coal India Ltd’s near-monopoly status.

 

Morgan Stanley says the move will pose downside risk to India’s coal imports, but could take a few years for mining to start. The brokerage has maintained “underweight” for Coal India stock at a price target of Rs 221.

 

Aggressive bidding in auction could lead to higher overall cost and support domestic coal auction prices or vice versa, but that would not materially affect the prices of linkage coal supplies, it says.

 

Of 29 brokerages that cover the Coal India stock, 21 rate "buy” or higher, five “hold” and three “sell” or lower; their median price target is Rs 333.50, according to Thomson Reuters Eikon.

 

Source: The Hindu Business Line