* Premium coal makes up less than 10 percent of total mined
* Pricing freedom to boost income as it goes public
* Price deregulation to be slow, difficult (Adds analyst's quotes and background)
NEW DELHI, June 4 (Reuters) - Coal India Ltd, the world's largest coal miner, will increasingly benchmark its premium grade to world prices, lifting its revenues and another small step towards energy pricing deregulation.
The state-owned firm, which produced 87 percent of India's 531 million tonnes of coal output in 2009/10, discounts most of its prices against international grades as the government wants to keep power costs down and encourage industrial growth.
But the government has been easing back on energy price controls, last month doubling the price of natural gas pumped by state firms. [ID:nSGE64J02M]
"A decision has already been taken that premium coal should be priced on import parity basis. That is, import price minus 15 percent," A.K. Sarkar, director of marketing, told Reuters.
Sarkar said Coal India, which earned 520.9 billion rupees ($11.17 billion) in 2009/10, discounts prices by 50-60 percent over international rates.
The landed cost of high-grade coal from Indonesia on India's east coast is around $50 a tonne, according to traders.
He said some coal sold by its unit, Eastern Coalfields, has been based on the new formula since October under deals signed with some government-owned utilities.
"This will definitely improve the top line and bottom line of the company substantially," Pawan Burde, vice president at PINC Research, said.
"But it will also raise power costs and that will be bad for the economy. So there might be opposition to this within the government itself. It cant have Coal India benefitting at the cost of consumers."
Coal India, which has led India's hunt for coal assets overseas, is set to sell a 10 percent stake in an initial public offering by August that could raise roughly $2.7 billion, the biggest share sale by a state firm this year.
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