Coal India banks on 25 key projects to double production by 2020

KOLKATA: Coal India's plan to double production to almost 1 billion tonnes by 2020 hinges precariously on the successful completion of 25 key projects that are meant to deliver half the targeted output.

For most of these projects, land is yet to be acquired, environmental approvals have to be obtained and transportation of coal by rail, known as evacuation, has to be arranged.

"While environment clearance for all of these projects may be a certainty — either on time or delayed — evacuation could be an issue at regions," a senior Coal India official said on condition of anonymity. "The coal projects can be taken up provided the evacuation system is in place at these locations." To speed up the rail links, the government is forming special purpose vehicles in which Coal India is likely to hold the majority stake, followed by the Indian Railways and the respective state governments. The SPVs will set up three rail lines that will have the capacity to carry 300 million tonnes of coal from areas that are now logistically constrained. The estimated investment in these projects is about Rs 8,000 crore. A tripartite memorandum of understanding has been signed for the 93-km Tori-Shivpur-Kathautia railway line. Coal India will hold a 64 per cent in this venture, the Indian Railways 26 per cent and the Jharkhand government 10 per cent.

The second project is a 52-km Jharsuguda-Barpalli track in Odisha. The third project is a 450 km stretch in Mand-Raigarh coalfields in Chhattisgarh.

Coal India officials agreed there is a "concentration of risk" in the production expansion plan, with some 463 million tonnes to come from 25 of the 152 projects to be developed by 2020.

The projects that have been planned are mostly opencast mines. Coal India is trying to reduce the risk by increasing production from underground mines, which currently contribute about 10 per cent of output, which was 494.24 million tonnes in 2014-15. However, underground mining is an issue because producing from deeper seams is costlier, the official said.