Under pressure to develop or relinquish, CIL commits fresh capex to complete projects

5th December 2019

By: Ajoy K Das

Creamer Media Correspondent


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KOLKATA ( – Stung by a government directive to either develop or relinquish, State-run Coal India Limited (CIL) has earmarked capital expenditure (capex) of $7.89-billion to complete 66 ongoing projects undertaken by its various operational subsidiaries.

The 66 ongoing projects, when completed, would have peak rated capacity of 500-million tons.

As reported earlier by Mining Weekly Online, in view of the fact that the Indian government has liberalised the coal mining industry and is slated to hold coal block auctions exclusively for private miners, the Coal Ministry has come down heavily on the State miner for delays in exploring and operationalising 110 coal blocks with estimated reserves of 40-billion tons, allotted to it in 2011.

The Ministry has asked CIL to prepare and submit an action plan with definitive timelines to bring these assets into production and if on review the timelines are found to be unacceptable in terms of gestation periods, the blocks would be taken back and put up for auction for bidding by private miners.

Government officials said that the production target of one-billion tons a year for CIL had been brought forward to 2024, from an earlier target of 2026. According to the officials, the fresh infusion of capital into ongoing projects was in line with a government directive to achieve production of 600-million tons by end of current year and 750-million tons during 2020/21 and that such production would be necessary to achieving one-billion tons a year by the target year.

The sources said that about 55% of the total capex would be incurred by CIL operational subsidiary South Eastern Coalfields Limited (SECL) in completing 23 ongoing projects with peak rated capacity of 192-million tons a year. SECL is the largest operational subsidiary of CIL with total production of 157-million tons a year.

The second highest capex – $1.19-billion – would be riding on completing 11 ongoing projects of operational subsidiary Mahanadi Coalfields with peak rated capacity of 156-million tons a year. Another $837-million would be incurred by Western Coalfields to complete 15 projects with peak rated capacity of 35-million tons a year.

Eastern Coalfields would spend an estimated $361-million to complete four projects with peak rated capacity of 17-million tons a year.

Edited by Creamer Media Reporter



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