CIL sets aside 42,600 cr for cleaner coal transport, solar

Pramod Agrawal, chairman and managing director of Coal India Ltd.
Pramod Agrawal, chairman and managing director of Coal India Ltd.


  • The company will take up nine FMC projects with investments of 2,500 crore by FY25
  • It also plans to spend about 3,600 crore in 24 railway connectivity projects

State-run miner Coal India Ltd (CIL) plans to invest around 42,600 crore in low-emission infrastructure for fossil fuel mining and green energy to help India achieve its net-zero targets, said the company’s chairman and managing director Pramod Agrawal.

Considering the growing criticism of coal use, Agrawal said CIL plans to invest 24,000 crore in first mile connectivity (FMC) projects in three phases, including 10,500 crore in phase I involving 35 projects, which will enable mechanized transportation of 415 million tonnes of coal. “We have invested very heavily on evacuation. Mechanized evacuation was just 120 million tonne in Coal India (till a few years back). By December 2024, it will increase to more than 550 million tonnes," he said in an interview.

In the second phase, the company will take up nine FMC projects with investments of 2,500 crore by FY25 which would handle the mechanized evacuation of 57 million tonnes of coal. Seventy more projects have been identified in the third phase which would require an investment of 11,000 crore.

FMC refers to transportation of coal from pitheads to dispatch points from where it is transported to consumers. Under FMC, coal producers adopt alternative transportation methods such as mechanized conveyor system and computerized loading on to railway rakes, to replace road transport.

The company also plans to spend about 3,600 crore in 24 railway connectivity projects.

Agrawal noted that with the development of FMC, infrastructure conveyor belts, silos and more usage of trains will come into play, and do away with heavy reliance on trucks and roadways, which will eventually reduce air pollution.

“Our target is 90% of the coal should get evacuated through mechanized means. It significantly reduces pollution. Suspended particulate pollution falls 80%. By 2026-27 it will be 90% and it will be the gamechanger for managing pollution," Agrawal said.

In its efforts to diversify into newer and sustainable businesses, the company has drawn up major plans for solar power.

Although the current installed capacity of Coal India’s solar power generation is only around 10 MW, the company plans to increase this to 3,000 MW or 3 GW, which would entail a cumulative investment of about 15,000 crore by 2024.

Currently about 500 MW of solar power capacity is under construction and 50 MW is likely to come up by March-April this year, the CMD said. Out of the 3 GW, about 1.5 GW would be used for Coal India’s captive consumption and the rest would be set up on land to be provided by states to Coal India. The power generated would be sold to states.

“We are targeting for 3,000 MW, out of this 1,500 MW will be in our area where it will be directly consumed by us so that our power bill goes down. We will ourselves set up power plants for the rest of 1,500 MW but in land of others and sell it to them. Because at the peak we consume something like 2000 MW, which we now buy, and now we should dilute that purchase," Agrawal said, adding that in the process, the company would also be able to contribute more toward ESG (environment, social and governance) requirements.

“We are talking about pure play solar power plants. We are talking about investing in this because this will give us sustained revenue for quite some time," Agrawal added.

He also threw light on the company’s coal gasification plans, a significant way to put coal to cleaner use. Through coal gasification, Coal India is eyeing to produce Dimethyl ether (DME) and synthesis gas (syngas).

“DME can be mixed in LPG. That is a good replacement and syngas we can use for manufacturing many things. These two we are looking at, but we are looking at the viability," he said adding that syngas produced through coal gasification would be sold to fertilizer manufacturers.

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