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National Coal Index 2021: Key Points

National Coal Index:

The Ministry of Coal has started the commercial auction of coal mines on a revenue share basis using the National Coal Index (NCI).

Key Points

  • It is a price index that reflects the change of price level of coal in a particular month relative to the fixed base year.
  • The base year for the NCI is Financial Year 2017-18.
  • Prices of coal from all the sales channels of coal, including import, as existing today are taken into account for compiling the NCI.
  • The amount of revenue share per tonne of coal produced from auctioned blocks would be arrived at using the NCI by means of a defined formula.
  • NCI is composed of a set of five sub-indices:
    • Three for Non-Coking Coal and two for Coking Coal.
      The three sub-indices for Non-Coking Coal are combined to arrive at the Index for Non-Coking Coal and the two sub-indices for Coking Coal are combined to arrive at the Index for Coking Coal.
    • Thus, indices are separate for Non-Coking and Coking Coal.
  • As per the grade of coal pertaining to a mine, the appropriate sub-index is used to arrive at the revenue share.