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International Coal Pricingpresents preliminary research, review of literature and comments on published papers or on any relevant subject C oal is a critical input for power, fertilizer, iron and steel (I&S) and the cement sector. At times up to 75 per cent of the power generated in India is coal fired. 1 Besides being used on a large scale as domestic and eateries fuel, coal also plays an important role in paper, brick kiln and chemical industries. Except for I&S, every other consumer uses coal primarily for its inherent thermal properties, that is, heat generated during combustion. That precisely is the reason why in international nomenclature, the terminology non-coking coal has been replaced by thermal coal. Apart from combustible material, coal also contains noncombustible impurities and is represented essentially by its ash content. Ash is the solid incombustible residue obtained after burning the coal. Moisture content is another negative quality parameter of coal. It could be either inherently present in coal or could get added during mining, cleaning, transport, stock-piling, etc. Coal price and pricing and its socio-economic impact have become a major subject of concern and therefore for debate in recent times. For the first time in the modern history of India, coal has become an important political issue. Coal consumers in India believe that total moisture content in the coal used by them quite often is rather unreasonably high. All other negative quality parameters of coal, physical or chemical in nature, are in some or the other way associated with the ash content and ash composition of coal. INDIAN SCENARIOIn India, coal is sold on the basis of grades, first conceived in the wake of World War I in 1917. Since nationalization, coal gradation and coal pricing have been controlled by the Union Ministry of Coal (MOC) and/or Coal India Ltd (CIL). Till 31 December 2011, non-coking coal grades used to be dependent on Useful Heat Value (UHV) expressed in kcal/kg as shown in Table 1. UHV took into account the heat trapped in ash (A) produced by burning the coal and the heat lost in removing the moisture (M) while burning the coal. Equal importance was assigned to the heat loss arising out of ash and moisture contents.