Govt plans to transform CIL and NLCIL from coal companies to energy companies

• According to the Ministry of Coal, a total of 117 projects have been planned under the diversification strategy

• Apart from diversification, CIL and NLCIL are also expected to focus on clean coal technology

New Delhi: The government is planning to transform state-run Coal India Ltd (CIL) and NLC India Ltd (NLCIL) from coal companies to energy companies, the Ministry of Coal said on Thursday. "Diversification was felt a necessity, especially in the light of climate change debates, diversifying into non-coal, secure new businesses, productively utilise sizeable reserves/funds in their balance sheet, fiduciary responsibility towards long-term future of coal-mine workers, leveraging economic growth, particularly in eastern region, need to invest in coal mines and related infrastructure to eliminate substitutable coal imports, support 100 MT coal gasification and likely coal exports," said the ministry in an official statement.

The Ministry of Coal has two large PSUs — CIL and NLCIL under its administrative control. CIL operates in seven states and NLCIL in five states. CIL is a hard-core coal company with seven subsidiaries — while NLCIL has ventured into new sectors (power generation, renewable and coal mining). CIL contributes about 80 percent of India's domestic coal production and 65 percent of coal consumption.

Diversification: 117 projects in the pipeline

According to the Ministry of Coal, a total of 117 projects have been planned under the diversification strategy. This includes 26 projects in new business areas entailing an investment of Rs 1,41,931 crore, 19 clean coal technology projects worth Rs 31,140 crore and 72 coal mining projects with an estimated investment of Rs 73,002 crore. The overall investment totals to Rs 2.46 lakh crore. 

Along with diversification, coal PSUs to focus on clean coal technology

Apart from diversification, the two PSUs are also expected to focus on clean coal technology. This is expected to provide sustainability to the coal mining business as state-run coal miners ramp up production to meet the target of 1 Billion Tonne by 2023-24. The government has already directed coal PSUs to invest in coal bed methane (CBM) gas, which is natural gas trapped in a coal seam. India has the fifth largest proven coal reserves in the world and thus holds significant prospects for exploration and exploitation of CBM.

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Project Feasibility Reports (PFR) have been prepared for three CBM blocks — Jharia CBM Block-I, Jharia Coalfield, Raniganj CBM block, Raniganj Coalfield, Shogapur CBM Block – I (SECL Areas), and Sohagpur Coalfield — and have been in-principally approved by BCCL, ECL and SECL Board of Directors.

In addition, the government has also placed a lot of focus on coal gasification, which is considered as a cleaner option as compared to burning of coal and utilises the chemical properties of coal. Syn Gas produced from coal gasification can be utilised in producing Synthetic Natural Gas (SNG), energy fuel (methanol & ethanol), production of urea for fertilisers and production of chemicals such as Acetic Acid, Methyl Acetate, Acetic Anhydride, DME, Ethylene and Propylene, Oxo chemicals and Poly Olefins. In line with the above objective, the Ministry of Coal has taken initiatives of utilising coal through coal gasification and as such an action plan has been prepared to achieve 100 MT coal gasification projects by 2030.

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