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By Sudarshan Varadhan
NEW DELHI, Oct 10 (Reuters) - Indian miners are lobbying
against a government proposal to link a new coal index to
international prices, documents reviewed by Reuters show, which
could delay creation of the index.
India plans to create a national coal index to end state-run
Coal India's control over prices and privatise the coal sector,
as the energy-hungry nation for the first time looks to invite
bids from global firms for coal mining blocks by end-2019.
A government panel has proposed two price formulas, both of
which use prices of imported coal to arrive at a benchmark,
government documents reviewed by Reuters showed. One of the
proposals includes a plan to link the index directly to a
foreign counterpart, such indexes in Indonesia and Australia.
Both proposals would likely hike local coal prices closer to
international prices, potentially denting local coal's
competitiveness as it is typically lower-quality.
The index is central to Prime Minister Narendra Modi's push
to attract foreign investment in the coal sector, which could
open up trading of coal futures and options.
But the index faces an objection from industry group
Federation of Indian Mineral Industries, which counts Rio
Tinto's India unit and India's Adani Enterprises
among members.
It wrote to the government in August arguing against basing
prices on imported coal and urged it to instead base prices on
Coal India's fuel supply agreements and e-auctions.
(Reporting by Sudarshan Varadhan
Editing by Alexandra Ulmer and Deepa Babington)
