Coal India plans to invest 19,650 crore by FY24 to increase production capacity by 330 metric tons. CIL is building three railway lines at Central Coalfields Ltd and Mahanadi Coalfields Ltd

State Coal India Limited (CIL) plans to invest 19,650 crore by FY24 to increase coal transportation capacity by 330 million tons (mt) through the construction of railways and the establishment of joint ventures (JV).

The railway traffic of the world's largest coal mining company is carried out against the background of concerns about coal shortages. However, the situation has improved and the fuel inventory of 136 coal-fired power generation projects is sufficient to meet the demand for 9 days, totaling 166.109 gigawatts (GW).

CIL is building three railway lines at Central Coalfields Ltd (CCL) and Mahanadi Coalfields Ltd (MCL), investing Rs 7,994 crore, and transporting 170 million tons per year. The public sector enterprise has also established joint ventures with Chattisgarh, Jharkhand and Odisha with an estimated investment of Rs 11,656 crore to transport 160 million tons of fuel each year.

"The Maharatna coal mining giant is building three railway lines with its own funds on the basis of deposits in CCL and MCL, with an estimated capital of Rs 7,994 crore, to create an annual coal transportation capacity of 170 million tons (mtpa). In addition, the company also Established four railway joint ventures with Chattisgarh, Jharkhand and Orissa with a capital expenditure of Rs 11,656 crore, which will help transport 160 metric tons of coal per year,” CIL said on Tuesday.

"By FY25, CCL, MCL and Southeast Coalfield Co., Ltd. are expected to account for around 69% of CIL's total coal production, and it is in these areas that the company is actively laying the foundation for evacuation infrastructure," it said.

CIL holds 64% of these joint ventures, with the rest held by railway public sector units and the states. Power plants in India burn 1.85-1.87 metric tons of coal per day to generate electricity.

“In order to increase the coal evacuation capacity by 330 metric tons per year through the railway model by fiscal year 2024, when production is expected to increase significantly, Coal India Limited will invest an estimated Rs 19,650 crore in capital to strengthen its railway infrastructure,” it said.

India has the world's fourth-largest coal reserves and the second-largest producer of fossil fuels. Although CIL's production target for this fiscal year is 660 metric tons, the coal purchase volume is expected to be 740 metric tons.

“Currently, CIL’s rail transport from its own side lines accounts for 56% of its total supply. If loading from sheds, private washing machines and MGR is also considered, the percentage of coal transported by rail will increase to 79%,” CIL said.

The depletion of fuel inventories in power plants has led to concerns about possible power shortages. In view of the fact that coal-fired power generation projects totaling 202.22 GW are still the backbone of India's power generation, accounting for more than half of India's power generation, this is of great significance.

"The doubling of the Tori-Shivpur (CCL) railway line was put into use in December 2019, and the ongoing doubling of the railway line will increase the evacuation capacity from the existing 32 metric tons/year to 100 metric tons/year," it says.

“The Jharsuguda-Barpali-Sardega (MCL) single line was put into use in April 2018, the line was doubled, and the construction of Barpali’s bulbs and Jharsuguda’s flyover complex is underway. The FMC projects of Sardega 20 mtpa and Lajkura 15 mtpa are in progress. This coincidence of railway connections will increase MCL’s transportation capacity by 65 mtpa."

India's daily electricity consumption has exceeded 4 billion units, resulting in an 18% increase in coal consumption between August and September 2021 compared to the same period in 2019. On October 7 and October 8, the fuel inventory of Indian power plants was depleted to 7.3 metric tons.

As Mint reported earlier, Haryana, Punjab, Uttar Pradesh, Rajasthan, and Jammu and Kashmir have experienced power overdrafts and load shedding due to power shortages. Haryana reported a shortage of 1.5 to 1.7 million units (MU), while Jammu and Kashmir faced a shortage of 3.45 MU. Punjab faces a shortage of 1 to 5 MU, and Rajasthan faces a shortage of 1 to 1.5 MU. Uttar Pradesh reports a shortage of 0.5 to 1.16 MU

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