Aim is to produce two-thirds of 1 bt coal from 3 states by FY29: P M Prasad

To improve the coal supply chain, the remaining 55 of 92 FMC projects will be operationalised by FY29

This interview has been updated to correct an error in the previous version  Increasing coal production has led to focusing on improving evacuation infrastructure to match the higher supply, and the coal ministry is prioritising projects to transporting the commodity efficiently and in a cost-effective manner. P M Prasad, chairman and managing director, Coal India Ltd (CIL), in an email interview with Puja Das, said as the state-owned company expected to produce two-thirds of its 1 billion tonne goal by FY29, from the three states of Odisha, Chhattisgarh and Jharkhand. At a time when India needs to have a stable supply chain of critical minerals, including rare-earth elements, domestically, CIL is exploring critical-mineral blocks of lithium, graphite, and cobalt in the country and in countries such as Australia, Argentina, and Chile. Edited excerpts.

 

Has there been a shift in the functioning of the company, which is aiding surplus coal availability?

 

CIL is geared up to meet the coal demand. At present, the amount in the system is about 161 million tonnes, with around 103 million tonnes with CIL and 58 million tonnes at domestic coal-based power plants. Meetings of sub-groups and inter-ministerial committees are held every week to monitor coal stocks at linked power houses to address any demand surge and ascertain sufficient supplies. Our monsoon preparedness ensures there is no loading disruption at rail sidings even if there is heavy rain.

 

How much does CIL estimate to produce and despatch in FY26?

 

The aim is 875 million tonnes and the despatch target is 900 million tonnes.

 

What are your coal-export plans?

 

As such there are no plans, but if there is any demand we will take a look after meeting the domestic requirements.

 

How are you planning to improve the coal-supply infrastructure?

 

CIL is constructing seven major railway lines to enhance evacuation capacity for supply increases. Three lines will be in Chhattisgarh, and two each will be in Odisha and Jharkhand, with plans to produce by 2028-29 two-thirds of its 1 billion tonne target from these states. Currently, four rail lines with a capacity of 250 million tones annually are operational, and three additional lines with a combined capacity of 115 million tonnes are under construction and expected to be ready by 2026-27.

 

It has initiated 92 first-mile connectivity projects totalling 994 million tonnes in annual capacity. Of these, 37 projects (373.5 million tonnes) are operational, with the rest to be completed by 2028-29. Additionally, we are developing new railway sidings and integrating them with rapid loading systems to improve both the quantity and quality of coal delivery as production grows. CIL is also renewing old sidings to strengthen connectivity with main rail lines. 

 

What’s the status of exploring critical minerals abroad? Is there any project in the pipeline, specifically for rare-earth elements?

 

We are participating in domestic auctions held by the Ministry of Mines. CIL has emerged as preferred bidder for two domestic graphite blocks -- one in Madhya Pradesh and the other recently in Chhattisgarh. We have inked a non-binding agreement with IREL India to cooperate and collaborate on the development of critical minerals including rare-earth elements.

 

CIL is scouting for critical mineral assets within the country and overseas in mineral-rich countries like Australia, Argentina, and Chile. Our focus is on lithium, graphite, and cobalt. We are exploring assets currently under development and also the potential long-term projects where assets are in the exploration stage.

 

What is the status of coal gasification plans?

 

CIL is pursuing coal to synthetic natural gas (SNG) and coal to ammonium nitrate. For this, we have joined hands with Bharat Heavy Electricals Ltd (Bhel), Gail, and Bharat Petroleum Corporation Ltd (BPCL). Through the joint venture with BHEL, Bharat Coal Gasification & Chemicals has been incorporated for setting up an ammonium nitrate project of 660,000 tonnes per annum capacity at Lakhanpur, Odisha. Coal Gas India is a joint-venture entity between CIL and Gail for gasification of coal to SNG of a capacity of 633.6 million normal cubic metres at Bardhaman, West Bengal. The technology is capable of gasifying coal having high ash content in the range of 18-30 per cent.

 

A similar project of similar capacity in a tieup with BPCL will come up in Chandrapur, Maharashtra.

 

Coal Minister Kishan Reddy last November had said CIL would develop 36 new projects in the next five years. What is the status of those?

 

The cumulative capacity of the 36 projects is 196 million tonnes a year, which have estimated extractable reserves of around 4,800 million tonnes. Of the 36, project reports have been approved for 27 and these are under pre-project activities like acquisition of land and grant of statutory clearances. The remaining nine are being considered. This financial year, mining operations started in two greenfield projects of a capacity of 6 million tonnes a year. Three more projects -- collectively of a capacity of around 19 million tonnes a year -- are expected to start operations. This apart, six-seven discontinued mines offered on a revenue-sharing basis are anticipated to go on production.

 

Efforts on CIL’s profit and revenue maximisation?

 

The key driver for revenue maximisation is growth in coal sales. Any increase in sales directly boosts our bottom line. Automation, new technologies, digitising mining processes, fuel-efficient machines, and first-mile connectivity projects contribute positively to our top and bottom line.

 

CIL has initiated various diversification ventures. For instance, it holds about 30 per cent in its joint venture with Hindustan Urvarak Rasayan, and over the last two financial years, our share in profit after tax from this venture amounted to ₹900 crore.

 

To prepare for the future, CIL has initiated various diversification ventures that are expected to enhance our revenue streams. For instance, CIL holds about 30 per cent in its joint venture with Hindustan Urvarak Rasayan, and over the last two financial years, our share of the profit after tax (PAT) from this venture was ₹900 crore. Furthermore, we are enhancing operational efficiency at all levels.

 

How is CIL making its net-zero efforts and meeting its ESG (environmental, social and government) targets?

 

CIL utilises a multipronged approach to achieve its ESG goals. Our environmental initiatives include large-scale afforestation, community water supply, energy-efficient operations, and solar power generation. In the past five years, we expanded tree plantations over 7,824 hectares. We registered 4,110 hectares for afforestation under the Green Credit Program and shared 250,000 kilolitres of water with 1.2 million people in 880 villages during FY25.

 

Our coal output for FY25 was 452 million tonnes, with 60 per cent sourced via eco-friendly surface miners, which reduce noise and dust pollution. Additionally, our FMC projects employ piped conveyor belts for coal transport, further minimising environmental impact.

 

In a phased manner, we aim to commission 92 such projects of an annual capacity of 994 million tonnes by FY29. CIL is committed to developing 3,000 Mw of solar power capacity as part of its net-zero aim by FY28. We have also signed an agreement with Indian Institute of Technology, Hyderabad, for establishing a Centre of Clean Coal Energy and Net Zero.

 

Our expenditure on corporate social responsibility was ₹6,313 crore in 11 years ended FY25. This is higher by 27 per cent than the statutory requirement. On governance, Business Responsibility & Sustainability Reporting is done annually that provides regular updates on ESG performance and initiatives.