Coal India shares hit near-three-year high as Modi explores breakup
NEW DELHI (Reuters) - Shares of Coal India Ltd(COAL.NS), the world's biggest coal miner, hit their highest level in nearly three years on Thursday after Reuters reported that Narendra Modi, who will become prime minister on Monday, was exploring breaking up the company and opening up the sector.
The stock was among the top gainers on the Nifty, rising as much as 8.22 percent in early trade to 401.40 rupees, the highest since August 2011.
Modi wants to fix India's inefficient coal sector quickly to improve electricity supply across the country. Coal generates more than half of the country's power and is the cheapest form of energy.
Sources said any reform will begin with Coal India, which accounts for 80 percent of India's total coal output but has failed to meet its output targets for years.
Red tape, strikes, protests against land acquisition and delays in obtaining environmental approvals have kept coal output far below demand, making India the world's No.3 importer even though it sits on the fifth-largest reserves.
(Reporting by Krishna N Das; Editing by Tony Munroe)
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India could allow commercial coal mining by foreign companies if they set up units in the country, opening the door for global giants like Rio Tinto to access the world's fifth largest coal reserves, a source familiar with the matter said. Full Article