The Middle East war drives up raw material prices, putting pressure on the profits of Indian coal companies, which are forced to cut production and accelerate diversification.

(1) The Middle East war has disrupted the energy supply chain, leading to a significant rise in prices of key mining raw materials such as explosives and diesel — by early April, explosive prices had increased by 26% compared to pre-war levels, and diesel prices have risen about 50% since mid-March. Facing this cost pressure, Coal India stated in April that it was absorbing the rising costs itself to avoid a "chain reaction" effect on the economy. (2) Despite increased electricity demand in the summer, the share of renewable energy in India’s power generation structure rose to a record 19% this quarter, while coal's share remained at around 70%, forcing the company to reduce output by about 8% this quarter. (3) Although coal is expected to continue playing an important role in India’s energy mix for at least the next decade, long-term challenges have prompted Coal India to begin diversifying into renewable energy and critical mineral mining.