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Coal India  to  pump  in  over  19k cr  to raise coal transport capacity

Coal-based power projects, totalling 202.22 GW, remain the mainstay of India’s power generation, accounting for more than half of the total generation capacity. (Photo: Mint)Premium
Coal-based power projects, totalling 202.22 GW, remain the mainstay of India’s power generation, accounting for more than half of the total generation capacity. (Photo: Mint)

  • Coal India plans to invest 19,650 crore by FY24 to increase capacity by an additional 330 mt
  • CIL is constructing three railway lines in Central Coalfields Ltd and Mahanadi Coalfields Ltd

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State-run Coal India Ltd (CIL) plans to invest 19,650 crore by FY24 to increase coal transportation capacity by 330 million tonnes (mt) by constructing rail links and setting up joint ventures (JVs).

The world’s largest coal miner’s rail mobility play comes against the backdrop of a coal shortage that has raised concerns. The situation has however improved with fuel stock sufficient for nine days at 136 coal-run power projects totalling 166.109 giga watt (GW).

CIL is constructing three railway lines in Central Coalfields Ltd (CCL) and Mahanadi Coalfields Ltd (MCL) at an investment of 7,994 crore to transport 170 million tonnes annually. The public sector undertaking has also formed JVs with Chattisgarh, Jharkhand and Odisha, which envisage an investment of 11,656 crore to transport 160 million tonnes of fuel every year.

“The Maharatna coal mining behemoth is constructing three railway lines from its own funds, on deposit basis, in CCL and MCL at an estimated capital of 7,994 crore to create 170 million tonnes per annum (mtpa) coal transportation capacity. Additionally, the company has forged four rail joint ventures with Chattisgarh, Jharkhand and Odisha at a capital outlay of 11,656 crore, which would help move 160 mtpa of coal," CIL said on Tuesday.

“Around 69% of CIL’s overall coal output is expected from CCL, MCL, and South Eastern Coalfields Ltd by FY25 and it is in these fields that the company is aggressively laying foundation for evacuation infrastructure," it said.

CIL holds a 64% stake in these JVs with the remaining being held by rail public sector units and the respective states. India’s power plants burn 1.85-1.87 mt of coal everyday to generate electricity.

“To increase coal evacuation capacity through rail mode by 330 mtpa by FY 2024, when production is expected to scale up significantly, Coal India Limited is investing an estimated capital of 19,650 crore to strengthen its rail infrastructure," it said.

India has the world’s fourth largest coal reserves and is the second-largest producer of the fossil fuel. While CIL’s production target is 660 mt for the current financial year, the coal offtake is expected to be 740 mt.

“Currently CIL’s rail transportation from its own sidings accounts for 56% of its total supplies. If loading from goods sheds, private washeries and MGR is also considered then the percentage of rail movement of coal goes higher to 79%," CIL said.

Depleted fuel stocks at power plants have led to concerns about a possible electricity shortage. This assumes significance given that coal fuelled power projects totalling 202.22 GW remain the mainstay of India’s power generation and account for more than half of India’s power generation capacity.

“The doubling of Tori-Shivpur (CCL) rail line was already commissioned in December 2019 and the tripling of the line which is under process shall enhance evacuation capacity to 100 mtpa from the existing 32 mtpa," it said.

“The Jharsuguda-Barpali-Sardega (MCL) single line was commissioned in April 2018 and the construction work for doubling of the line along with loading bulb at Barpali and a flyover complex at Jharsuguda are under progress. Dovetailing of FMC projects of Sardega 20 mtpa and Lajkura 15 mtpa to this rail connectivity would lift MCL’s transportation capacity by 65 mtpa."

India’s daily electricity consumption has crossed 4 billion units, resulting in an 18% spike in coal consumption during August-September 2021 compared to the corresponding period in 2019. Fuel stocks at India’s power plants had depleted to 7.3 mt on 7 October and 8 October.

This also comes at a time when there has been overdrawing of electricity and load shedding by Haryana, Punjab, Uttar Pradesh, Rajasthan, and Jammu and Kashmir because of electricity shortage as reported by Mint earlier. Haryana is reporting shortages in the range of 1.5 to 1.7 million units (MUs), while Jammu and Kashmir is facing shortage of 3.45 MUs. Punjab is facing shortages in the range of 1 to 5 MUs and Rajasthan’s shortages are in the range of 1 to 1.5 MUs. Uttar Pradesh is reporting shortages in the range of 0.5 to 1.16 MU

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