State-owned Coal India has charted out a Rs 16,000 crore capex plan for the fiscal 2025-26 spread across coal production, renewable energy (RE), and thermal power projects. With a coal production target of 875 million tonnes in FY26, the company is also advancing its diversification into solar, coal gasification, thermal power, and critical minerals, chairman -cum-managing director P M Prasad told Arunima Bharadwaj in an interview. The company aims at installing 3 giga watts (GW) of RE capacity by 2028 and is keen on pumped storage power projects.
What is Coal India’s target for coal output in FY26?
CIL has been given an 875 million tonne (MT) coal output target for FY 2026. For the power sector we are aiming at 668 MTs. The actual supply to power utilities during FY25 was 616 MTs. Target for coking coal production is pegged at 76 MTs.
What is your capital expenditure plan for FY26?
CIL as whole has a capex target of Rs. 16,000 crore for FY26. Depending on the requirement this may even go up higher. During the past few years we have already heavily invested in large equipment, land, evacuation infra etc. Of this year’s total capex, cumulatively, coal transportation and evacuation infrastructure which includes setting up rail sidings and corridors; coal handling plants/silos; and roads account for over a third at nearly Rs. 5,622 crore.
This is followed by land, at Rs. 2,382 crore. Heavy earth moving equipment, washeries, and other plant and machinery make up Rs. 1,952 crore. Other heads like mine development, solar, JVs and pithead power plants consume the remaining capex.
What are the key sectors where CIL is diversifying into to generate additional revenue streams? What will the investments be like?
Solar power of 3000 MW capacity by FY28 tops our diversification portfolio. Coal gasification is another avenue that the company is pursuing vigorously. On this front, we have aligned with three PSUs, through joint venture mode. Bharat Coal Gasification & Chemicals Limited, a JV of CIL and BHEL has been incorporated for setting up a coal gasification based ammonium nitrate project of 6.6 lakh tonnes per annum capacity at Lakhanpur, Odisha.
Coal Gas India Limited, a JV between CIL and GAIL, deals with coal-to-synthetic natural gas of 633.6 million normal cubic metre capacity at Bardhaman, West Bengal. The gasification is technology capable of gasifying coal having high ash content in the range of 18% to 30%. For a similar project having similar capacity, which would come up in Chandrapur Maharashtra, CIL has joined hands with BPCL. Coal Gasification Plant Development and Production Agreement was signed with the Ministry of Coal for financial support of Rs. 1,350 crores for each project.
We are also pushing for two pithead based thermal power units. One is MBPL, fully owned by our subsidiary MCL. It will be an ultra-super critical thermal plant of 2X800 MW in the first phase. It will have a capital investment of around Rs. 16,000 crores. The other is a JV on 50:50 equity sharing with Damodar Valley Corporation – a 2×800 MW ultra-supercritical thermal power plant in Jharkhand. It is a brownfield project that will expand the existing Chandrapura Thermal Power Station and is estimated to cost around Rs. 16,500 crore.
How does the company plan to expand its RE portfolio to achieve its net-zero target?
In RE, our concentrated focus is on solar. We are aiming at 3000 MW of solar power capacity by FY28 at an estimated investment of Rs. 15,000 crores. As an offshoot of RE we are also pursuing Pumped Storage Power (PSP). CIL has collaborated with EDF India Private Limited, a subsidiary of Électricité de France SA, a French multinational electric utility company owned by the Government of France. A non-binding Term Sheet was signed in February this year to establish a JV Company. Recently, we have also tied up with AM Green Ammonia to supply carbon-free energy through a combination of solar and wind in tune with achieving a cleaner energy mix towards net-zero emissions.
Can you share CIL’s road map for entering the critical minerals sector in India and abroad?
Critical minerals is another diversification foray of CIL. CIL has successfully opened its account in domestic critical mineral assets emerging as the preferred bidder for Khattali Chotti graphite block in Alirajpur district of Madhya Pradesh, which is the first ever non-coal mineral mining venture of the company. We have been identified for another one in Chattisgarh.
We are exploring two types of assets, the ones currently under development stage and the other where assets are in the exploration stage, within the country and overseas. We are looking at lithium, one of the world’s most sought-after metals used for batteries in electric vehicles and mobile phones and graphite. CIL is actively scouting for opportunities in mineral rich countries such as Australia, Argentina and Chile. We will take serious due-diligence before arriving at a conclusion.
What is the present status of coal stocks at thermal power plants and at CIL’s end?
Coal inventory at our pitheads as of May end was at 104 MTs while the domestic coal based power plants are stocked with nearly 56 MTs.
Does the company anticipate any shortfall in coal supplies to power plants during the monsoon season, given logistical challenges?
If you look at the coal adequacy ending May 2025 a total of 160 MTs of coal is available in the system at CIL and domestic coal based power plants combined. Weekly subgroup-level meetings and inter-ministerial committees are held, attended by officials from MoC, MoP, CEA, Railways, CIL and its subsidiaries to monitor the coal stock status of linked powerhouses to address any demand surge and make sufficient supplies. Contracts for transportation of coal from pitheads to the sidings have been awarded ensuring rake loading at CIL sidings is not disrupted due to heavy rainfall. To avoid detention of rakes, adequate contracts for cleaning of railway tracks on regular intervals during the monsoon have also been awarded.
How much is the current premium on e-auction compared to last year and what is the trend you see going forward?
In the current year’s April, the add-on over notified price was 39% compared to 50% of April last year. In a business as usual scenario normally the markets fetch us a premium of somewhere around 40%. We anticipate it will plateau at this level of around 35% to 40%.