 "coal, fossil fuel")
The Union Ministry of Coal has set a 1-billion tonne (bt) coal production target by the end of the current fiscal year, on the back of enhanced private coal mining. Of the targeted 1 bt, national miner Coal India (CIL) will produce 780 million tonnes (mt), while privately owned captive and commercial mines will contribute 162 mt, the balance by The Singareni Collieries Company.
In the action plan prepared by the coal ministry, it said the government was confident of awarding 25 more mines this fiscal year to private players.
To date, 133 coal mines with a peak-rated capacity of 515 mt have been awarded since 2015 to private companies. Of these, 27 have commenced production.
The plan also stated that interest from premier public sector companies, such as GAIL (India), Bharat Heavy Electricals, and IndianOil, for coal gasification would further the interest in coal auctions.
Among new initiatives, the Ministry of Coal is looking to set up a ‘coal-trading platform’, for which CRISIL has been appointed as consultant.
Capital expenditure (capex) and monetisation
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For 2023-24 (FY24), the capex target of CIL has been set at Rs 16,500 crore. The ministry said the projected asset monetisation plan for FY24 was Rs 50,118 crore, of which CIL’s share would be Rs 10,118 crore.
CIL will award its mines to private contractors through the ‘mine developer and operator (MDO)’ mode. The balance monetisation will be through a coal block auction to the private sector.
In the previous fiscal year, the asset monetisation target for the coal ministry was Rs 30,000 crore, of which it achieved Rs 24,626 crore. A majority of the monetisation feat was through auction.
CIL has lately increased the MDO involvement at its mines. In a recent conversation with this paper, Pramod Agarwal, chairman and managing director, CIL, said the company had outsourced close to 75 per cent of its coal excavation.
Apart from MDO, the ministry also plans to award discontinued/abandoned mines of CIL to private companies through a revenue-sharing model. It also plans to start mine closure activities by this year for the coal mines of CIL and Singareni that had been abandoned/discontinued before 2009.
According to the action plan, CIL will diversify into newer business areas, such as aluminium, solar equipment manufacturing, coal gasification, coal to hydrogen, and renewable power generation, apart from expanding core business to touch 1 bt production at its end.
