The world’s largest coal miner Coal India has warned of escalation in domestic coal prices this fiscal due to the shortage in company production output caused by mining restrictions imposed by the environment ministry.

“We could not take up new mining in nine coal-mining areas due to restrictions laid down by MoEF. Owing to this, we will fall short in our production targets,” CIL chairman Partha S. Bhattacharjee said, adding, “We are pressing the government for hike in coal price within the fiscal, let’s see.”

“We keep coal price in control by increasing production but now this control is no more. So, do not complain if there is ‘high’ increase in price,” the chairman said late night yesterday, adding he had intimated “all those who matter in this regard.”

Compounding CIL’s woes on cost pressure, he said wage revision was also pending in June. But, the coal major will amortize the additional burden in the next few years and will not take a hit in single year, he said.

The CIL Chairman who was speaking on sidelines of a programme organised by Bengal Chamber of Commerce and Industry said the pressure on production was expected to continue for the next financial year (FY’2012), with the shortfall from earlier production estimates pegged at 40-44 million tonne.

This fiscal year the coal production is likely to be around 439-440 million tonne, which is an increase of only two per cent over the previous year and is less than the projected target of 460 million tonnes.

In 2009-10, CIL production increased to 6.8 per cent to 431 million tonne.

He said there would be no new fuel supply agreement due to the sudden halt in expansion in mining. This was expected to hurt new thermal power projects in the country for lack of fuel linkages.

The senior CIL official said he was confident of signing a deal for long-term coal supply agreement with an overseas miner in near future, as talks were at advanced level.