Coal India exploring acquisition of critical mineral assets abroad
New Delhi: As part of its pivot towards diversification and value chain integration, Coal India Limited (CIL), a Maharatna PSU, is exploring the acquisition of critical mineral assets, like Lithium Cobalt and Nickel, abroad, said the company in its latest annual report. “We are exploring the acquisition of lithium, cobalt, and nickel assets abroad and have amended our Memorandum of Association (MoA) to include non-ferrous and critical minerals. We are currently identifying suitable overseas assets for mergers and acquisitions,” said the annual report for the year 2022-23.
CIL allocates substantial capex for FY24 towards diversification
For the current fiscal year, Coal India has planned a capital expenditure (CAPEX) of Rs 16,600 crore. “As part of our investment plan, we have strategically allocated a substantial amount towards diversification projects, including ventures such as solar power, thermal power plants, revival of fertiliser plants, surface coal gasification, coal bed methane and others. With a focus on acquisitions and JVs, we seek to venture beyond our core competencies, tap into emerging opportunities and manage associated risks effectively,” said the report.
Coal India may face pricing pressures due to commercial mining, renewables
Referring to the competition posed by commercial coal mining and the expansion of cheap renewable energy, Coal India’s annual report said, “Commercial mining and emphasis on renewable power generation pose a threat to our market share in the energy sector. Competition from commercial mining and renewables can also lead to pricing pressure.”
“Based on our Fuel Supply Agreements (FSAs), we would remain the primary supplier of coal to thermal power plants in the near future,” it added.
Coal demand expected to rise and peak around 2040
Stating that despite the emphasis on renewable/non-fossil fuel-based energy, transitioning from coal is highly unlikely in the foreseeable future, the annual report said, “Share of coal in the energy basket is also expected to remain significant as the demand for coal is likely to be in the range of 1.3-1.5 billion tonnes by 2030. The demand is also projected to rise and peak around 2040.”
“We closely monitor coal demand. By FY 24-25, coal demand is estimated to reach 900 million tonnes, including supply through e-auction. In order to meet this demand, we set our production target at 840 million tonnes, aligning it closely with the projected demand figures,” said Coal India Chairman PM Prasad.
“Also, certain sectors like steel manufacturing will continue to demonstrate consistent demand for coal. Additionally, the demand for coal as a feedstock for synthetic fuel production, such as petrochemicals, gasification, and methanol, is expected to gain momentum in the near future,” he added.
Coal India’s production grew by 24% to 703.20 MT
During the last five years, Coal India’s production grew by 24 percent to 703.20 MT in FY 22-23 from 567.37 MT in FY 2018. CIL’s supplies to power sector comprised 84 percent of its entire despatch during FY22-23. Coal-based electricity generation, including imported coal, was 1,145.86 BU during 2022-23. The generation through domestic coal sources was 1105.25 BU or 96.5 percent with the major portion of coal supplied by Coal India, said the report.
“Capital expenditure of CIL has registered a phenomenal growth of 20.90 percent over the previous year. This helped your Company spend H18,619.27 crore in FY 22-23 compared to H15,400.96 crore in FY 21-22. The target Capital Expenditure of Rs 16,500 crore has been accomplished with 112.84 percent achievement rate,” said the Chairman. “Your Company’s vision is to ensure that there is no shortage of coal in the country and to make the country self-reliant in terms of coal,” said the Chairman.
(PSU Watch– India's Business News centre that places the spotlight on PSUs, Bureaucracy, Defence and Public Policy is now on Google News. Click here to follow. Also, join PSU Watch Channel in your Telegram. You may also follow us on Twitter here and stay updated.)
