Coal India profit soars as shortages drive demand and prices
Coal India, one of the world’s top producers of the fuel, reported a two-fold jump in its second-quarter profit as demand and prices surged.
Net income for the three months ended September rose to 60.4-billion rupees ($738-million) from 29.4-billion rupees a year earlier, Coal India said in a stock exchange filing Monday. That beat an average analyst estimate of 55.5-billion rupees compiled by Bloomberg.
The state-run miner, which produces about 80% of India’s coal, shipped almost 5% more of the fuel during the period and earned a higher average price on those sales, it said.
Demand for coal, which accounts for nearly 70% of India’s electricity generation, has soared following a post-pandemic revival in industrial activity and on increased use of air conditioning during a sweltering summer that delivered severe heat waves. The war in Ukraine has sent seaborne coal prices through the roof, adding competition for domestic supplies that fell short of demand.
Coal India has benefited from the supply squeeze. The company earned an average 1 781.3 rupees a ton on sales, 23% higher from a year earlier, driven by a nearly four-fold jump in average spot auction rates. Revenue rose 28% to 298.4-billion rupees.
The miner’s profits, which jumped to a record in the first quarter, underscore the global resurgence in coal as war-induced shortages of natural gas have pushed nations to burn more of the dirtiest fossil fuel to meet increasing energy needs. The revival in demand has drawn investments in coal power projects and has boosted earnings at coal miners from China to Australia.
A firmer outlook for the fuel has bolstered Coal India’s plans to invest in expansion projects, and the miner expects sales to continue for years despite growing clean energy installations.
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