Coal India Ltd will will spend ₹6,000 crore as capital expenditure on mine development from 2015-16, as its board has approved a road map for achieving 1 billion tonne annual production by 2020.
Chairman and Managing Director S Bhattacharya said on Friday the company will earmark another ₹6,000 crore for investment into special purpose vehicles (SPVs) that it intends to form with State Governments and the Indian Railways for coal evacuation from its mines.
“We have prepared a mine-wise plan to achieve 908 million tonnes (mt) annual production for the fiscal year-ending March 2020. We are also in the process of preparing a plan for the remaining 92 mt,” said Bhattacharya.
To achieve the target, the miner would need a compounded annual growth rate of 12 per cent a year in production from 2015-16, he added.
“Two subsidiaries – Mahanadi Coalfields Ltd and South Eastern Coalfields Ltd – will play a vital role in achieving the plan as most virgin mines are with them,” said Bhattacharya.
According to the production ramp-up plan, Mahanadi Coalfields’ annual output in 2020 will be 250 mt and South Eastern Coalfields’ will be 240 mt.
The planned SPVs with the Railways and State Governments will help in evacuation of the increased coal production, said the Chairman
“The SPV will be an independent company and the financial returns from it will accrue to the State. We are talking to Odisha, Chhattisgarh and Jharkhand. We may also require West Bengal and Uttar Pradesh,” he added.
Already, South Eastern Coalfields Ltd has formed two SPVs with Chhattisgarh and involved the Railways.
The company will also focus on improvement in technology upgrade in existing mines.