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 3-4 months would present challenges for production due to monsoon impacts on growth. However, Coal India remains on track to achieve its overall production target of 773 million tonnes this fiscal, despite a year-on-year production increase of 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.