Coal India hopes to rejoin dividend list as ECL improves performance

Kolkata: Coal India aims to eliminate Rs 2,200 crore in accumulated losses at its subsidiary, Eastern Coalfields Ltd (ECL), and to rejoin the dividend list by FY 2025-26, a top official said on Sunday.

At the foundation day event, Coal India chairman P M Prasad said Bharat Coking Coal Ltd, another previously loss-making subsidiary, has already re-entered the dividend list. He expressed confidence that ECL would achieve similar success by FY 2025-26. Coal India has seven coal-producing subsidiaries.

“ECL is performing well and is on track to meet its production target of 54 million tonnes this year. We expect to eliminate two-thirds of its Rs 2,200 crore accumulated losses this fiscal year, with the remaining losses cleared by the following year, allowing it to rejoin the dividend list,” Prasad said.

He added that the next few months would present challenges for production due to monsoon impacts on growth.

The public-sector miner is expected to achieve around 823 million tonnes of production by March, falling nearly 15 million tonnes short of its original target of 838 million tonnes set for FY’25. This comes despite a projected growth rate of nearly 7 per cent in the remaining months of the fiscal year. Notably, year-on-year production increased by only 2.3 per cent in October.

Prasad also highlighted the potential of Gevra mine under South Eastern Coalfields, which is set to become the world’s largest with a production target of 70 million tonnes in two years. Gevra’s current production stands at 59 million tonnes, with a target of 61-62 million tonnes for FY’25.

By 2030, Coal India aims to boost underground production to 70 million tonnes, up from the current fiscal target of 34 million tonnes. FY’24 underground production was 28 million tonnes.

Prasad said if Coal India can increase its production by 50-60 million tonnes, it would significantly reduce thermal coal imports, which currently strain forex reserves. The company’s overall production target is 1 billion tonnes by FY 2026-27.

He emphasised Coal India’s aggressive focus on first-mile connectivity, aiming to eliminate overloading and underloading issues, which cost the company Rs 150-200 crore.

“We plan to add 150-200 km of connectivity annually. Once we reach the 900 million tonne level, both overloading, which affects railways, and underloading, which causes Rs 150-200 crore in losses, will be eliminated,” Prasad said.

Prasad also highlighted the company’s diversification and solar initiatives.

The close door event was attended by the Coal Minister G Kishan Reddy and senior department officials. “Coal is expected to remain a mainstay in the energy mix of the country in the coming years,” Reddy said.

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