State-owned Coal India has set a target of producing 915 million tonnes of coal in 2025-26, the company’s chairman and managing director P M Prasad told Arunima Bharadwaj in an interview. Additionally, the company plans to come out with the draft red herriing prospectus (DRHP) for the listing of its two of its subsidiaries — Bharat Coking Coal and Central Mine Planning and Design Institute — by the end of the current fiscal. CIL, which reported a 12.5% rise in its consolidated net profit in the second quarter of the current fiscal, has also laid huge plans to increase its green energy portfolio to 3 giga watt (GW) by FY28 and has signed 15 non-disclosure agreements in the critical mineral segment.
What is Coal India’s capex target for FY25?
The aspirational capex target is Rs 20,000 crore for FY25. Till October, the capex spend was around Rs 7,904 crore. Capex typically picks up from the third quarter of the fiscal and intensifies in the fourth quarter.
Is coal production keeping pace with the target set for FY25?
Coal production by the company and its subsidiaries was 438.3 million tonnes (MTs) as of November 16, up by nearly 10 MTs over last year’s same period. Of this, the coking coal output was 32.4 MT. Our production progressd exceedingly well till the first quarter, with 8% growth. The tempo was disrupted by higher than normal rainfall in almost all our producing units in the second quarter. We started recovering the lost ground from October and are targeting growth in the range of 7% during the remainder of the fiscal year and reach as close to the target of 838 MTs as feasible.
What is the current status of coal stocks at thermal plants? How much growth in your production and stock positions do you envisage for FY26?
Domestic coal-based power plants are stocked with 33 MTs of coal as of November 16 compared to 21.5 MT as on the same date last year. Bulk of the coal was supplied by CIL. Coal inventories at CIL’s pitheads stood at 65.4 MTs. Production target for FY26 is pegged at 915 MTs. Stock position is variable and depends on how the demand for coal shapes up.
The company has received the nod of department of investments and public asset management (Dipam) to list two subsidiaries – CMPDI and BCCL — and is in the process of appointing consultants. When do you plan to launch the IPOs?
We have floated the tender enquiries for engagement of the bankers/book running lead managers (BRLMs), for both of these subsidiaries. The offers are currently being evaluated. Once the bankers/BRLMs are selected by the first week of December 2024, we will appoint other key legal, tax, accounting and technical intermediaries. Throgh these entities, we will complete our due diligence process and plan to file DRHP during the current fiscal.
How does CIL plan to expand its overseas business in critical minerals mining? Has there been any new deals signed with any of the countries?
Under the nation’s Atma Nirbhar commitment for self-sufficiency in critical minerals we are exploring asset acquisitions. The dialogue is progressing with critical mineral asset owners in Australia, Argentina and Chile for equity stake as a favoured option. Around fifteen non-disclosure agreeements have been signed so far with several companies across the critical mineral value chain. Initial due diligence has been completed for some of those assets.
What are the coal gasification projects undertaken by CIL?
CIL and BHEL have formed a JV called Bharat Coal Gasification and Chemicals Ltd for ammonium nitrate as an end product which is an essential ingredient in explosives which CIL uses in bulk quantities in its mining operations. Tendering activity for finalization of lump sum turnkey contractors is moving forward for this. CIL had also executed a JV with GAIL for coal to synthetic natural gas (SNG) and tenders are to be issued soon. A coal gasification plant for SNG is on the anvil by Western Coalfields, one of our subsidiaries.
How does CIL plan to diversify its business into the renewable energy segment?
Solar lists high in our diversification into renewables. Plans have been rolled out for setting up 3,000 MW of solar power capacity by FY28 and subsequently 2,000 MW under the second phase. Around 1,400 MW capacity is to come up within CIL’s command areas and 2,800 MW in the states of Gujarat, Rajasthan and UP. Around 800 MW capacity will be on pan India basis. Setting up Pump Storage Projects in abandoned mines of our subsidiaries is also on the radar. Feasibility studies for setting up PSPs in five sites are underway.
What are the financial implications for CIL on account of the Supreme Court granting states the power to tax mineral rights and mineral bearing lands retrospectively?
The matter is sub judice. The impact is basically on two of our subsidiary companies namely Mahanadi Coalfields Limited and Central Coalfields Limited.
The government is expected to come out with a coal exchange soon. What are your thoughts about it and how is it likely to impact Coal India?
The exchange will help provide more market access to all the players and help realize the true market price of coal.
How are the current premiums on e-auction of coal?
Till October 2024 the premiums were hovering around 50%. For the month of October the premium rose to 65%.