Mechanisation, better logistics catalyst for record coal stock: CIL CMD

Our output of 189 MTs in the first quarter of the current financial year was around 14 MTs more compared to last year's same quarter, giving us the leverage to step up our supplies, Prasad said

From domestic coal shortage two years back to surplus coal stock with the power plants across the country, domestic coal availability has improved significantly. P M PRASAD, chairman and managing director of the national miner Coal India Limited (CIL), attributes the reason to several factors ranging from a boost in production to seamless coordination between different departments and increased mechanisation at their mines. Edited excerpts of his emailed interview to Shreya Jai.

CIL’s coal production in 2023-24 saw a jump of 10 per cent over the year before, which is when power units faced a domestic coal shortage. What factors led to the production spike?

Timely firming up of contracts, sub-delegating powers to managements of our subsidiary companies for quicker decision-making, flexibility in contracts of coal production and overburden, persistent coordination with ministries of railways, power, environment, and forests in identifying potential bottlenecks and levelling them were some catalytic measures in augmenting our production to 773.6 million tonnes (MT) in FY 2023-24. Out of the 13 mine development operator (MDO) projects awarded for contractual mining, operations have begun in 4 projects, which contributed around 7 MTs of coal in FY 2024. The support from the coal ministry, state governments, and district-level authorities in gaining these clearances was vital.

In the current year, what is the status of coal supply, especially to the power sector?

Our output of 189 MTs in the first quarter of the current financial year was around 14 MTs more compared to last year’s same quarter, giving us the leverage to step up our supplies. Coal supply to the power sector was 160 MTs during this period, higher by 6 MTs compared to Q1 of last year. Even so, we supplied a record 38.4 MTs to the non-power sector, logging 16 per cent Y-o-Y growth. Higher domestic coal supply, much of it aided by CIL, ensured adequate stock at power plants to the tune of 45 MTs. Coal inventory at CIL is also at around 80 MTs, providing a sufficient buffer. Rake availability also was good. More rakes would have ensured even higher coal supply.

By when is the company targeting to achieve the 1 billion tonne coal production target and what is the framework to achieve it?

We are aiming to reach 1 billion tonnes of coal output by FY 2027. Four of our subsidiaries, Mahanadi Coalfields Limited (MCL) leading with 290 MT; South Eastern Coalfields Limited (SECL) 250 MTs; Central Coalfields Limited (CCL) and Northern Coalfields Limited (NCL) with 140 MTs each are expected to contribute 82 per cent of the total to this endeavour. With the deployment of a higher degree of mechanisation, awarding contractual mining to MDOs and operational efficiency, we feel confident of achieving the desired target.

What is the target for coking coal production?

It is slated at 70.8 MTs, which is a 10 MT jump over the actual coking coal production of 60.4 MTs achieved in FY 2024.

Is CIL eyeing a price revision soon?

Coal India has capped its prices for six years. CIL is a listed company and coal pricing being market sensitive, any predictions on this front do not augur well.

What are your focus areas for revenue maximisation?

Volume growth in the sale of coal maximises our revenue because major costs are fixed and any increase in sales is advantageous. We are pursuing automation and digitalisation of the mining processes and fuel-efficient machines that bring down operational costs. There is also a net fall in our headcount annually almost to the tune of 10,000 to 12,000. We are going in for MDO mode and contractual mining. Contractual production cost is comparatively less than that of departmental cost and helps in keeping the costs lower. There is a substantial improvement in the supply of quality coal. Grade conformity has improved to 76 per cent during FY 2023-24 from 70 per cent in the preceding year.

Is CIL taking up projects to aid efficient evacuation of coal?

We are implementing three major rail infrastructure projects in MCL, CCL, and SECL – our three subsidiaries which cumulatively account for 68 per cent of our 1 billion tonne-target. We are also executing four similar projects on a joint venture basis. Evacuation capacity in these high-yielding coal fields will increase substantially through the creation of this infrastructure. We are constructing 24 greenfield and brownfield railway sidings in four of our subsidiaries and renovating old sidings, strengthening rail connectivity between the sidings and the main rail lines.

We are pursuing a total of 72 first-mile connectivity projects having a total evacuation capacity of 837 MT per year, which will be fully functional by FY 2030. With an already existing 151 MT capacity, the total would go up to 988 MT.

What is the plan towards achieving net carbon zero status by the targeted year 2025-26?

We have a multi-pronged approach. The goal is to create as much carbon sink potential as possible and reduce CO2 emissions that accrue out of our operations. Our plans begin right from overburden removal where we deploy blast-free vibro-rippers that suppress dust pollution. Following this, we implement surface miners in our open cast (OC) production which entails blast-free production with minimal ecological damage to the surface. In FY 2023-24, 57 per cent or 425 MTs of our entire OC production of 748 MTs was met through surface miners. We plan to increase their numbers in the future. We are scaling up eco-friendly mechanised coal transportation that results in a reduction of significant carbonaceous emissions and particulate matter.

Greening of mining areas through plantation and grassing in the last financial year was 2,416 hectares (Ha). This creates a significant carbon sink potential of about 50 tonnes/Ha per annum. Efforts are on for plantation over 5,000 hectares under the government’s Green Credit Programme. We are setting up 3,000 MW of solar capacity by FY 2030. A major portion would be used to power our own mining operations. Beyond that, we are planning to take up 2,000 MW of more solar capacity.