Coal will remain at the centre of India’s energy mix until 2047 despite the country’s ambitious energy transition goals, Coal India Ltd (CIL) chairman and managing director B. Sairam told Mint, as rising industrialization, urbanization and power demand continue to drive coal consumption.
Sairam, who heads the world’s largest coal miner and a company that accounts for about 80% of the fuel supplied to India’s power sector, said electricity demand continues to grow. Supplies to the power sector rose nearly a fifth to 49.77 million tonnes (mt) in July FY27 from 42.35 mt a year earlier, while supplies to the non-regulated sector increased 21% to 14.42 mt from 11.89 mt.
Sairam said Coal India’s production target for FY27 has been set lower at 815 mt, compared with 875 mt last year, because of high opening coal stocks despite projections of strong power demand. He also said the West Asia war has pushed up input costs and could keep the company’s profitability broadly flat this year.
CIL also plans to list its subsidiaries Mahanadi Coalfields Ltd (MCL) and South Eastern Coalfields Ltd (SECL) during the current fiscal.
Edited excerpts:
What is the timeline for listing Coal India’s subsidiaries?
The listings of our two subsidiaries, Bharat Coking Coal Ltd (BCCL) and Central Mine Planning and Design Institute Ltd (CMPDI), have been completed, and their stocks are trading well on the stock exchanges. The next companies lined up for listing are MCL and SECL.
The Government of India has mandated the dilution of 25% of Coal India Limited’s equity stake in both subsidiaries. In line with this mandate, Coal India is initially working towards diluting 10% of its equity stake in each of MCL and SECL. To facilitate the Offer for Sale (OFS) process, the company is in the process of appointing the required intermediaries, including book running lead managers (BRLMs) and merchant bankers. Both listings will take place this year.
How do you see coal demand evolving as India accelerates its energy transition?
Coal is still at the centre of the energy basket, and it will continue to hold its position till 2047. In 2047 while becoming Viksit Bharat, that would be the time when India will be joining that bandwagon of developed countries. And I foresee that that will be the year when India will be joining the exclusive bandwagon of select countries where the per capita energy consumption is upward of 4000 KWh. Currently its around 1600 KWh. The demand will come from industrialization.
These would be through the government's push towards interaction, massive urbanization. These trigger points are driving the growth of the power sector in India.
What is your demand outlook for FY27 as power consumption grows?
The production target (for FY27) is 815 million tonne. Historically, out of the overall production around 80% goes towards power. Last year, the production target was 875 million tonne. The target has been set lower this year as the stock position is high.
The industrial demand is also growing (along with household demand) because the growth of industries is an indicator. The IIP (index for industrial production) or the core sector index—tell the story about industrial growth.
FY26 was a year of extremely low demand, and FY27 is witnessing extremely high demand. In 2025-26, there was excess rainfall in India. So, in the month of May, we were able to build stocks at the power plants; wherein May happens to be the month when depletion takes place at the plants conventionally.
Further, June happens to be the period when sowing takes place in Punjab, Haryana, Rajasthan, and monsoon takes place at the same time and they need not depend on the pumps (for irrigation). But this year, the monsoon got delayed. So, one, there was excess heat in April, May, June, and then mid of June, the monsoon should have reached Punjab and Haryana, which it could reach only in July, and was maybe almost 20-25 days delayed.
Farmers could not delay sowing, so they had to rely on groundwater pumps for irrigation. This increased agricultural electricity consumption, particularly during the morning hours, adding to the overall power demand.
What is your outlook for the financial performance this fiscal? Has the war in West Asia impacted your operations and financials?
Last year, our PAT (profit after tax) was around ₹35,000 crore, and this year too, it is likely to remain around that level. The key reason is the impact of the Hormuz crisis on diesel prices, which is one of our largest operating inputs. Our departmental operations consume around 6 lakh litres of diesel annually, apart from the diesel costs incurred by contractors.
The impact of the disruption began to reflect from April. While retail diesel prices remained around ₹92 per litre, industrial diesel prices rose, reaching ₹155 per litre by the end of May. We absorbed the entire increase without passing it on through higher coal prices. Now the diesel prices have moderated.
Explosive costs have also risen significantly. Explosives are made of ammonium nitrate which is derived from natural gas. Ammonium nitrate prices increased by around 60–70%. India produces 12 million tonne of ammonium nitrate, out of which we use 8 million tonnes for our industrial purposes. The rise in these input costs is likely to impact our profitability, which may consequently remain broadly flat this year.
What is Coal India’s strategy for renewable energy generation?
We are significantly expanding our renewable energy portfolio. The company aims to establish 3 GW of solar capacity by FY 27–28 to offset its thermal power consumption. Building on this foundation, we plan to scale up our renewable energy portfolio to 9.5 GW of installed solar capacity by FY 2029–30, with major projects coming up in Gujarat, Rajasthan and Uttar Pradesh, besides our coal command areas.
We are also foraying into battery energy storage systems (BESS), which can enable round-the-clock power supply by addressing solar generation's diurnal limitations. We have won bids to implement BESS projects of around 1070 MWh in Telangana and Odisha. We have also decided that going ahead our new solar projects will be integrated with BESS.
How has the security situation evolved in the coalfields, primarily affected by coal theft and illegal mining?
The security situation remained a concern, particularly in BCCL, CCL, and certain operations in ECL, where illegal mining and coal theft were reported.
The union government has now taken a strong and proactive stand on the matter with the launching of the drive on “zero coal leakage” around a month ago, leading to a major crackdown on illegal coal mining, theft, and associated activities.
The CISF has been revamped, its manpower strength has been enhanced, and greater use of technology has been introduced. Coordination between the coal companies and the CISF has also been significantly strengthened. The entire mechanism is being closely monitored at the level of the Government and CIL.
As a result, the forces and officers on the ground are now working with greater vigour and effectiveness. Over the past month, instances of illegal mining and coal theft have reduced and can be said to have almost stopped in several areas. However, the key challenge is to sustain these gains over the long term.
How does Coal India plan to further reduce import dependency?
About 60 million tonne is imported by steel plants. They need coking coal, which is non-substitutable. Second, imported coal-based plants are there which find it cheaper to procure imported coal at landed price and their boiler is also designed for imported coal.
There are some domestic coal-based power plants which blend Indian and imported coal. We need to see how much we can substitute imported coal in their operations. If we are able to give good quality (low-ash content) coal then they are ready to substitute. Second is the NRS sector, which includes cement, fertilizer and other consumers, they also import as due to high demand from the power sector they are unable to procure domestic coal.
In terms of substituting imports, NRS is an attractive option, second are domestic coal-based power plants which also import coal for blending.
We are also thinking about exporting coal. We are eyeing exports to Nepal. Our officials have met representatives from Nepal. The demand is for sectors other than power.