COAL India aims to rejoin dividend list by FY 2025-26. COAL India targets rejoining the dividend-paying list by the fiscal year 2025-26. The company plans to eliminate Rs 2,200 crore in losses at its subsidiary, Eastern Coalfields Ltd (ECL). This strategic move highlights COAL India’s commitment to improving performance and ensuring financial stability, according to a senior official.
COAL India’s strategy to rejoin dividend-paying entities in India
Chairman P M Prasad expressed optimism about ECL’s future during a recent foundation day event. He confirmed that ECL is on track to meet its production target of 54 million tonnes this year. Additionally, Prasad expects to clear two-thirds of ECL’s accumulated losses within this fiscal year and eliminate the remainder by next year. This proactive approach is vital for re-establishing ECL as a dividend-paying entity.
Production challenges for COAL India in India and goals for dividend reinstatement
Prasad acknowledged that monsoon impacts may present production challenges in the coming months. Despite these hurdles, COAL India projects around 823 million tonnes of production by March. This figure falls short of the initial target of 838 million tonnes for FY25, despite an anticipated growth rate of nearly 7% in the remaining months. In October, year-on-year production saw a modest increase of only 2.3%. Notably, the Gevra mine under South Eastern Coalfields will significantly contribute to future growth, targeting a production goal of 70 million tonnes in two years.
Future production goals for COAL India to secure dividend payments
By FY25, Gevra’s production target stands between 61-62 million tonnes. Additionally, COAL India plans to increase underground production to 70 million tonnes by 2030, up from the current fiscal target of 34 million tonnes. In FY24, underground production recorded 28 million tonnes. If COAL India boosts its output by 50-60 million tonnes, it could reduce thermal coal imports significantly, which currently strain foreign exchange reserves. The overall production goal aims for 1 billion tonnes by FY 2026-27.
Infrastructure and connectivity improvements in India’s coal sector to support COAL production
Prasad emphasised COAL India’s commitment to improving first-mile connectivity. This improvement will address overloading and underloading issues that currently cost Rs 150-200 crore annually. The company plans to add 150-200 km of connectivity each year. Achieving a production level of 900 million tonnes will help eliminate these issues. “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 stated.
Diversification efforts and solar initiatives by COAL India to enhance energy production
The company is also exploring diversification and solar energy initiatives as part of its broader strategy. The event included Coal Minister G Kishan Reddy and other senior officials. Reddy noted that coal will remain a key component of India’s energy mix for the foreseeable future. This strategic focus on increasing production and improving infrastructure underscores COAL India’s commitment to reducing imports and enhancing domestic capabilities in the energy sector.
