Coal India Ltd (CIL) and its subsidiaries can buy the Mumbai IPL team almost 42 times, as it has Rs 20,682 crore ($4.8 billion) in surplus funds invested across banks in the country.

So what do CIL and its subsidiaries do with so much money? ?Nothing,? said a senior official from the coal ministry.

?The money is far in excess of their need and there is not much use it can be put to,? he added.

However, when contacted by FE, a CIL spokesperson said plans are afoot to ?invest the money in 119 projects that are coming up, setting up 28 coal washeries, forward integration projects with power plants and revival of Durgapur-based Mining & Allied Machinery Corporation (MAMC).

?The terminal year of the 11th Five-Year Plan envisages coal production of 520 million tonnes (mt). Last year we produced 370 mt. Hence, to scale up production we would need huge investment and we plan to use this money,? he added.

Many would say excess cash is a good problem. However, the key to smart spending and investing is to be neither overly cautious by leaving it all in a low-interest-bearing money market account nor overly optimistic by rushing to staff up or buy a new facility.

Chinese state-owned company Shenhua Energy Co, the world?s second-largest coal firm, plans to grow both organically and through mergers & acquisitions to make the enterprise larger, better and more profitable. It plans to raise up to $80 billion through stake sale, which would then be used to purchase mines, power plants and ports abroad to supply its energy needs.

However, CIL is in no hurry for any such move. The lackadaisical manner in which it proceeds was evident when Coal Ventures International (CVI), a special purpose vehicle formed from a joint venture between SAIL, RINL, NMDC, NTPC and CIL, lost out on acquiring coal blocks in Mozambique. Questions have also been raised about the CVI’s paid-up equity of Rs 3,500 crore ($810 million), which many believe is far too less to undertake any kind of acquisition abroad.

Given that CIL and its subsidiaries alone have $4.8 billion locked up in bank vaults, significant acquisitions, especially in the coking coal sector, could have been made. While state-run Chinese companies always believe that they benefit from a greater size, importance & visibility, CIL and its subsidiaries are nonchalant.

KPMG director Nabin Ballodia points out that the money could have been spent on acquiring new technologies. ?The current technology with CIL is outdated. Though in terms of equipment it can catch up with the rest of the world, exploration and mining techniques continue to be outdated.? With surplus money the size of the country’s consumer durables market, CIL and its subsidiaries could have made significant changes to their operations with it.

The money can be well spent on R&D and environmental conservation. The amount spent on R&D for the year 2007-08 amounted to a mere Rs 22.54 crore. Environmental measure and subsidence control saw investment of only Rs 31.12 crore last year. Another key area, conservation and safety in coal mines, continued to be grossly under funded. ?Safety and infrastructure is a big problem. We do not hear accidents that take place, but our mines are in a very bad state? said Ballodia.