Coal India facelift: CIL to become a tech-driven 'clean products' company

Company could get into segments such as coal tar, naphtha and coal gas, among many others

Coal India, the central government’s near-monopolist entity, also the world’s largest mining company, has embarked on a comprehensive transformation.

From a purely mining entity, the aim is to create a technology-driven products company, perhaps getting into segments such as coal tar, naphtha and coal gas, among many others.

The major decision to transform follows Coal Minister Piyush Goyal’s commitment at the United Nations Climate Change Conference at Paris in 2015. He’d committed to 20,000 Mw of renewable energy (RE) production by 2022. This was later raised to 175,000 Mw.

A shift to RE means less dependency on fossil fuels and more emphasis on environmentally friendlier, cleaner technology.

“We need to prepare ourselves for the changing scenario and evolve into a modern, technology-driven and clean products company. After all, we need to leave behind a greener Earth to posterity,” a senior Coal India official told Business Standard.

Coal mining would continue but the idea is to then turn the output into clean products which can meet the energy and steel sector’s requirements. 

“The process to change had long begun. We realised that in future, we cannot rely on mining alone,” the official added.

The first sign came when Coal India and NTPC, also government-owned, floated a joint venture (JV) to revive two sick units of Fertiliser Corporation of India, at Sindri in Bihar and Gorakhpur in Uttar Pradesh. In this project, Coal India is most likely to employ coal gasification technology, to convert coal into  valuable nitrogenous fertiliser, such as urea.

Many viewed it as the government’s move to divert Coal India’s huge cash reserves to revive sick units but it was also part of the transformation plan. There’s provision in the equally owned JV for inducting a strategic partner at a later date.

“We might collaborate with foreign partners having the technical knowhow and build the product lines on a public-private partnership (PPP) model,” the executive said.

In evolving into a products company, Coal India is most likely to build its capabilities around PPPs. And, consider developing products like coal tar, naphtha, coal gas or coal to liquid and other products. It is also working on means to develop coal-based fertiliser and byproducts.

Manufacture of coal tar would imply Coal India’s entry into the cosmetics and chemicals space. The tar is used to make paints, perfumes, synthetic dyes, photographic material, drugs and explosives, besides insecticide and pesticide. 

Under consideration is also technology to address the need of the steel and energy sectors with a single product or process. An official told this newspaper a technology is under consideration for enabling Coal India to first obtain the necessary chemicals and gas to power a gas-based steel plant from coal and thereafter ship the same coal to thermal power companies. An internal assessment to study the possibilities is on; external help might also be taken.

Also, through its consultancy arm, Coal India plans to offer mining consultancy services for nearly all minerals, to any entity.