Coal mining auction helps Coal India gain 6 per cent intraday
Trading at early lows on Thursday, the shares of Coal India Limited quickly recovered as a response to the Prime Minister's address regarding the launch of an auction process for commercial mining of 41 coal mines, a step taken under the initiative of 'self-reliant' India aiming at reducing the large imports of coal in the country.
The Ministry of Coal in association with FICCI is initiating this process of auction which is the first-time opening of the domestic coal sector for commercial mining. According to regulatory estimates, this development will increase production and improve productivity & quality as a result of use of latest equipment and technology. The coal sector in India is one of the most important sources of the overall energy requirement of the country and its relatively cheaper costs further gives it an edge.
Coal India Limited, the largest coal-producing company in the world, has already taken up the target of producing coal of 710 MT for the current year. The official statement of the company further stated that such efforts would support its 1 billion tonne coal production target for FY23-FY24.
The company's shares have been trading at multi-year lows but these initiatives from the key government authorities are sure to make a difference to the sentiment. On Thursday, the stock closed higher by 6 per cent at Rs 137.60.