Mining behemoth Coal India ( CIL) has given a major thrust to diversification and environmental hazard mitigation with a view to bring about a greater sustainability in its operations. While diversification would include creating a 3,000 MW solar portfolio, setting up coal to liquid projects, surface coal gasification projects, mechanising transportation and increasing the number washeries, it would take CIL towards achieving its net-zero pledge by 2024 . CIL’s net-zero pledge coincides with the company’s target of producing 1 billion tonne of coal by 2024 but that would not sway away the company from its core activity, mining.

“We have enhanced production and offtakes and will continue to do so as long as coal remains relevant to India’s power and industrial needs. But CIL has started making itself future ready and has put its plan in place so that it remains a going concern even at a time when coal will no more remain relevant to power generation and industrial usage, mitigating environmental risk,” a CIL executive said.

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The company, since late 2020, has lined up investment worth Rs 26,550 crore to carry out its diversification plans but it has kept creating a solar portfolio as its priority. CIL wants to put all the solar power projects on its own land with targets to install 195 MW in FY 22, 1,390 MW in FY 23 and 1,425 MW in FY 24, the company’s annual report for FY 22 states.

While solar projects aggregating 365 MW are under way, CIL has formed subsidiaries, CIL Navakarniya Urja and Solar PV for forward and backward integration of the entire solar power value chain, leading the PSU miner to a new business vertical. The company has already engaged M/s Deloitte Touché Tomatso India for providing consultancy and programme management services for new business and value addition, the annual report says. Although the annual report says only about a substantial investment in the renewable front, an official said the 3,000 MW capacity addition was planned with a war chest in excess of Rs 13,500 crore.

The company’s diversification plan doesn’t end with its solar dreams. It has floated a tender to set up a coal to liquid (methanol) plant at in investment of Rs 6,000 crore in tandem with the government’s methanol economy programme for reducing oil imports. The plant would come up at the Dankuni Coal Complex in West Bengal with CIL leasing out land for the project’s life assessed to be 25-30 years. The plant would come up on build-own-operate model and produce 6.76 lakh tonne of methanol a year. This would be used for blending with petrol to up to 15% for marketing in West Bengal, Odisha, Jharkhand and Bihar.

Surface coal gasification is yet another diversification plan converting coal to synthesis gas and subsequently to chemicals. CIL is exploring possibilities of setting up five plants in ECL, SECL, WCL and CCL areas, for which pre-feasibility and marketability studies are underway. CIL envisions producing 1.3 million metric standard cubic metres of Coal Bed Methane (CBM) a day from Ranigunj and Jharia coalfields for which it plans to invest Rs 2,400 crore.

The Centre asking the CPSU to make more investments has prompted CIL to plan such projects ahead of time but these projects would have very little immediate impact on the balance sheets.

After period of slump in coal sales bringing about a declining trend in profitability, CIL during the quarter to June has bounced back to growth in profitability with net profit at Rs 8,834. 22 crore, a whopping 64% year -on-year increase. This has been mainly backed by higher volume of coal sales, triggered by sudden surge in demand, expected to persist given the trend in demand for coal and renewable generation yet to stabilise. Realisation from coal sales at Rs 32,497.98 crore during the first quarter of the current fiscal grew 28% % y-o-y.