Cloud over CIL capex plan

Calcutta, Sept. 23: Coal India may have to curtail its investment plans as the PSU needs to allot more funds for compensation to land losers, under a new government ruling. The company had planned to invest a mammoth Rs 60,000 crore to produce almost 900 million tonnes of coal by the end of the decade, a target which may be out of reach now.

The Centre's decision to offer uniform compensation to land losers under the Right to Fair Compensation and Transperancy in Land Acquisition, Rehabilitation and Resettlement Act, 2013 may force Coal India to change its plans.

"Capital expenditure over the next five years will be Rs 60,000 crore. But, there is an issue of land acquisition," Coal India chairman Sutirtha Bhattacharya told shareholders at the company's AGM here today. The PSU miner is looking to acquire around 23,000 acres.

Through a notification on August 28, the government had extended the compensation rules under the 2013 land acquisition act to 13 central acts, including the coal bearing areas acquisition and development act. This means the compensation rules under the 2013 act will be applicable to land acquired for coal mining projects.

"The capex plan may change and we will be able to assess the impact in a few days. Different costs are applicable for land at different locations," Bhattacharya said. He added that several options were under consideration to keep the costs at an optimal level. Sources said the miner was looking to optimise the amount of land needed to dump the soil and rocks that lie above the coal seam.

He said the company was still in talks to acquire overseas mining assets. Coal India had decided to relinquish three-fourth of its leasehold licence area in Mozambique based on reports from its exploratory wing on low coal availability. "We are still in Mozambique and also in talks with different foreign states."