Coal India aiming to double output to one-billion tons a year by 2020 – by Ajoy K Das (MiningWeekly.com – July 17, 2015)

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KOLKATA (miningweekly.com) – Coal India Limited (CIL) dreams of producing one-billion tons of coal a year by 2020, and, as the sixth-largest miner in the world, having big dreams is not unusual. However, if past performance is seen as an indicator of future performance, then it has a lot of sceptics to prove wrong.

“CIL’s major challenge is to meet the rising demand from the power sector . . . and this is how the dream of achieving the one-billion-tons-a-year coal production [target] began,” the miner states in its Roadmap for Enhancement of Coal Production.

“The idea of ramping up production germinated at grassroots level and traversed up, growing bigger as the possible potential was realised,” the vision document adds.

With a current production of 494-million tons a year, the target centres on achieving a 15% compound average annual growth rate (CAGR). However, the road ahead may not be that easy as, over the past five years, CIL’s yearly growth rate has averaged between 0% and 7%, with the latter achieved only in the previous fiscal year.

But the Indian government, which owns and manages CIL, is not short on optimism. “CIL will invest $20-billion to $25-billion over the next five years to ramp up production. The country will be self-sufficient in thermal coal in the next two years,” Coal Minister Piyush Goyal said at a recent media interaction.

“The company will develop 75 to 100 new mines, upgrade technology and infuse equity in new joint ventures to achieve the production target,” Goyal said.

However, in a country where issues like land acquisition, environmental clearances, technology replacement and absorption take decades and only one new coal mine opened in the last five years, such optimism is not widely shared. “Aiming [for] sustained year-on-year growth of 15% is surely a tall order,” former CIL chairperson and MD Partha Bhattacharyya tells Mining Weekly.

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