Western Coalfields Ltd (WCL), a state run mining major, has received an approval from the standing linkage committee (SLC) for a plan to increase prices of coal sold by the company to its customers.

WCL is expected to be able to recover initial investment on new projects by charging more for the coal sold to the customers. The company is likely to generate about 12 per cent on initial investment but the increase is not likely to bring any benefits to the parent firm, Coal India. WCL accounts for just 0.4 per cent of CIL's total production and the increase will not have any significant impact on the earnings.

WCL was seeking permission to increase the price of coal as about 25 of its new projects were becoming unviable at current prices due to increasing manpower and infrastructure costs. DC Garg, chairman and managing director of WCL has said that all of its projects are not expected to generate 12 per cent earnings at 85 per cent capacity utilization level because of higher relief and rehabilitation packages to be given to land owners of the land required for the new projects.

SLC has allowed the company to increase the price but said that the price will be determined by the coal ministry.