by ajoy k. das
State-run miner Coal India Ltd. (CIL) has revived its 1-billion-ton-per-year (tpy) production target supported by acquisition of coal assets in Canada and Australia and complete switch-over to automated handling and transportation systems for more efficient “first-mile connectivity” between pithead and loading points.
According to federal Minister of Coal Prahlad Joshi, CIL would target production of 1 billion tons of the fossil fuel every year starting in 2024.
The production target has been revived following fresh assessment of demand stemming from the rising demand for electricity from thermal power plants, the minister said. Two years ago, the government set this production target to be achieved by CIL in 2025-2026, but put it on the backburner due to a lack of clarity on the demand forecast from thermal power generation companies and challenges faced by the miners in land acquisition and greenfield mine development.
However, new demand is surfacing from thermal power projects, particularly from new plants being constructed by NTPC Ltd., the country’s largest thermal power producer. Last month, NTPC added 1,320 megawatts (MW) of thermal power generation, taking its aggregate coal generating electricity capacity to 57,106 MW.
The Ministry of Coal reckoned that with NTPC planning to add 5,000 MW of thermal power generation capacity every year, there would be adequate incremental demand for coal over the long term to validate CIL’s revived plans of 1-billion-ton production per year.
The new production target is being backed by aggressive acquisition of coal assets overseas. According to information from officials, CIL would submit binding offers for coking coal mines in Canada and Australia by March 2020.
The officials said the miner had already identified “ready to produce operational mines” in Canada and Australia and merchant bankers were being appointed to act as financial and legal advisers for the acquisitions. CIL was looking at picking up equity stake in these operational mines in Canada and Australia with contracts to ship part production back to India.