CIL to step up spending to boost production, dispatches

State-owned Coal India Ltd, which has estimated a capital expenditure of about ₹17,000 crore for FY22, envisages to spend more in the coming years to boost production and dispatch levels. CIL’s capex stood at₹13,284 crore in FY21.

According to Pramod Agrawal, Chairman and Managing Director, CIL, coal would continue to play a lead role in the country’s electricity generation as indicated by the consumption pattern.

The company’s capex saw a twofold increase to ₹1,840 crore during the first quarter of FY22, compared to the same quarter last year as it continued to step up investments in evacuation infrastructure, land acquisition and procurement of heavy equipment.

Major share of capex

Procurement of heavy earth moving machinery, plant and other machinery that help in ramping up output through OC (opencast) mines typically accounts for a major share of the capex followed by investments in strengthening evacuation infrastructure like setting up rail sidings and corridors, coal handling plants, (CHP), silos and haul roads.

“The country’s planners are alternatively laying impetus on greener and renewable energy forms in a bid to migrate from largely fossil-driven energy economy to one that is powered by cleaner sources. From an environmental perspective, this is a welcome move. The entry of renewable energy sources, however, would not destabilise coal in the immediate future. It would continue its lead role in India’s electricity generation as indicated by the consumption pattern,” Agrawal said at the company’s 47th annual general meeting here on Wednesday.

Total power generation

Of the country’s total power generation of 1378.525 billion units (BU) during 2020-21, including renewable energy sources, coal based generation was 950.751 BU accounting for nearly 69 per cent. This apart, coal continues to stoke many non-power industries such as cement, fertilisers, sponge iron and aluminium.

CIL alone produces around 83 per cent of the country’s entire coal output.

Talking about ramping up production, he said the country’s largest miner had cleared 36 mining projects in FY21 with a sanctioned capacity of 332.77 million tonnes (mt) and incremental capacity of 220.12 mt.

These projects would add substantially to future production growth, he said and added that the company has devised a transformational plan to operationalise15 mines through engagement of mine developer-cum-operators, with an ultimate capacity of 160 mt per annum.

“CIL constantly monitors the progress of 35 high-yielding mining projects, for enhanced output, which between them contribute 70 per cent of the company’s total annual coal output. During 2020-21, these top 35 mines contributed 450 mt which is 75 per cent of the year’s total production of 596.22 mt,” he said.

CIL is also enhancing its evacuation infrastructure to have sufficient coal transportation outlets in place.

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