State-owned Coal India is betting big in its diversification into renewable energy and exploration of critical minerals. In line with its plans to ramp up its mining capacity and coal production, the company aims to increase its renewable energy capacity to 5 gigawatt (GW) in the next few years, Chairman and Managing Director P M Prasad told Arunima Bharadwaj in an interview. After recording elevated capex for the past many years, the company has now set its capex target for the fiscal at Rs 20,000 crore.
With a healthy coal inventory of 83 million tonnes, the company is confident of meeting the coal requirement by the power sector as the demand for power continues to rise. The state-run miner which reported a 26% rise in its consolidated net profit in the last quarter of the financial year 2023-24 at Rs 8,640.45 crore, is looking to put more fuel volumes on e-auction as it envisages 8% growth in output.
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What is your coal production target fir FY25 and how are the competing demands from various user industries going to be met?
Our output as well as off-take target is 838 MT for the current financial year. It means a production growth of 8.3% over what we actually produced in FY24 (773.6 MT). We are aiming to supply 661 MT to the power sector compared to nearly 620 MT of the previous fiscal. Target for coking coal is pegged at 70.8 MT.
What is the company’s capex target for FY25?
After having achieved a record Rs 19,711 crore against the capex target of Rs 16,500 crore in FY24, we aspire to pursue a capex of Rs 20,000 crore in FY25. The spending will be on many areas: land acquisition and related R&R (Rehabilitation and Resettlement), procurement of heavy-earth-moving machineries including other plant & machinery and creation of transportation infrastructure. First mile connectivity projects, silos, rail corridors, lines and sidings, which are meant to handle and evacuate the increased production in future, make up for a significant part of the capex plan for the year. We will be investing Rs 2,000-3,000 crore in each of these major heads.
How does the company plan to expand its renewable energy portfolio to achieve its net-zero target?
Among renewables solar power is accorded top priority in our diversification portfolio towards net zero efforts. We are aiming at a total of 5 GW (gigawatt) of solar capacity. Currently we are pursuing 3 GW by FY30 at an estimated investment of around Rs 15,000 crores. It is an ongoing process and we will reach there by achieving year wise targets. Beyond that, we will take up another 2 GW at an investment of Rs 10,000 crores.
What is the present status of coal stocks at CIL’s thermal power plants and at the pitheads?
Domestic coal-based power plants have stocks of around 45 MT and coal inventory at CIL is 83 MT making it a total of 128 MT.
How does the company plan to ramp up its FSA (fuel supply agreement) and e-auction volumes? How much is estimated for FY25? How are the current premiums on e-auction?
For the new capacities coming up in the power sector we are committing the FSAs on the back of a strong production growth. We have allocated linkages of about 87.6 MT of coal for a total plant capacity of 21,710 MW for the upcoming power houses. For the plants to be commissioned in future in Rajasthan, Maharashtra and UP we have earmarked a little over 29 MT to fuel around 6500 MW.
With sufficient stock at power plants there is no shortage and coal is being supplied as per their requirement. With the increased supplies there is a feeling of coal adequacy in the market. CIL places 10% of its total production under e-auction hammer with an option of increasing it to 20% after fulfilling power sector’s requirement. We are putting more coal on the e-auction platform but booking is dependent on the market dynamics and the demand.
The government had identified a few CIL mines to be converted into pump storage projects…
CIL has identified 24 abandoned mines or sites for pre-feasibility pump storage projects (PSP). A consultant has been appointed to examine these assets which can be gainfully converted into PSPs. Pre-feasibility report is expected to be submitted by November, after which a detailed feasibility report will be prepared to proceed further.
