P M Prasad: ‘Aim to reach 1 billion tonnes coal output by FY 2027’

‘With the deployment of a higher degree of mechanisation, awarding contractual mining to MDOs and operational efficiency, we feel confident of achieving the desired target.’

Photograph: Kind courtesy Coal India

From a coal shortage two years ago to surplus stocks with power plants across the country, coal availability in India has improved significantly.

P M Prasad, chairman and managing director of Coal India Ltd (CIL), says in an email interview with Shreya Jai/Business Standard this is because of several factors — from a boost in production to seamless coordination among different departments and increased mechanisation at the mines.

CIL’s coal production in 2023-24 jumped 10 per cent over the previous year, which was when power units faced a domestic shortage.
What factors led to the production increase?

Some measures augmented our production to 773.6 million tonnes (mt) in 2023-24 (FY24).

Those were firming up contracts in a timely manner, delegating powers to the managements of our subsidiaries, flexibility in contracts of coal production and overburden, and coordination with the Ministries of Railways, Power, Environment, and Forests in identifying potential bottlenecks and levelling them.

Of the 13 “mine development operator (MDO)” projects awarded for contractual mining, operations have begun in four, which contributed around 7 mt in FY24.

Support from the coal ministry, state governments, and district-level authorities in gaining clearances was vital.

In FY25, what is the status of coal supply, especially to the power sector?

Our output of 189 mt in the first quarter was around 14 mt more than in the same quarter in FY24, giving us the leverage to step up supplies.

The supply to the power sector was 160 mt during this period, higher by 6 mt compared to the first quarter last year.

Even so, we supplied a record 38.4 mt to the non-power sector, logging 16 per cent Y-o-Y growth.

A higher domestic coal supply, much of it aided by CIL, ensured adequate stocks at power plants –of 45 mt. Coal inventories at CIL are also at around 80 mt, providing a sufficient buffer. Rake availability was good.

When can CIL produce 1 billion tonne and what is the framework to achieve the target?

We are aiming at 1 billion tonne by FY27. With higher mechanisation, awarding contracts to MDOs, and operational efficiency we are confident of achieving the target.

What is the target for coking coal production?

It is 70.8 mt, an increase of 10 mt over the production of 60.4 mt in FY24.

Is CIL looking at price revision soon?

It has capped its prices for six years. CIL is a listed company. Pricing being market-sensitive, any prediction on this does not augur well for the future.

What are your focus areas for revenue maximisation?

Growth in volumes of sale maximises our revenue because a major part of the cost is fixed.

We are pursuing automation and digitisation of the mining processes and fuel-efficient machines to bring down operational costs.

There is also a net fall in our headcount annually — of 10,000-12,000.

We are going in for MDO mode and contractual mining.

The contractual production cost is less than the departmental cost and that helps in keeping the costs lower.

Is CIL taking up projects to aid efficient evacuation of coal?

We are implementing three major rail infrastructure projects, and are executing four similar projects as joint ventures.

The evacuation capacity in these high-yielding coal fields will increase substantially through this infrastructure.

We are constructing 24 greenfield and brownfield railway sidings in four of our subsidiaries and renovating old sidings, strengthening rail connectivity between the sidings and the main rail lines.

We are pursuing 72 first-mile connectivity projects having an evacuation capacity of 837 mt per year, which will be functional by FY30.

With an existing 151 mt capacity, the total will go up to 988 mt.

What is the plan for achieving net carbon zero status by 2025-26, the targeted year?

We have a multi-pronged approach. The goal is to create as much potential for a carbon sink as possible and reduce carbon emission on account of our operations.

Our plans begin from overburden removal, where we deploy blast-free vibro-rippers, which suppress dust pollution.

Then we implement surface miners in our open cast production, which entails blast-free production with minimal ecological damage to the surface.

In FY24, 57 per cent, or 425 mt of our entire open cast production of 748 mt, was met through surface miners.

We plan to increase their numbers. We are scaling up eco-friendly mechanised coal transportation, which results in reducing carbonaceous emission and particulate matter.

The greening of mining areas through plantation and grassing last financial year was 2,416 hectares.

This creates a significant carbon sink potential of about 50 tonnes per hectare a year.

Efforts are on to plant trees on over 5,000 hectares.

We are setting up 3,000 Mw of solar capacity by FY30.

A major portion would be used to power our mining operations. Beyond that, we are planning to build another solar capacity of 2,000 Mw.

Feature Presentation: Aslam Hunani/Rediff.com