Coal India Secures First Graphite Block in Green Energy Push

23 Jul 2024 , 10:28 AM

State-owned Coal India Limited (CIL) announced on Monday that it secured its first critical mineral asset, a graphite block, in Madhya Pradesh. Acquiring a graphite asset positions Coal India advantageously in the green energy transition, enhancing its contribution to sustainable energy solutions.

CIL emerged as the preferred bidder for the Khattali Chotti graphite block located in Alirajpur district, Madhya Pradesh.

At the time of writing on July 23, 2024, at 10:21 am, Coal India Limited (CIL) stock is trading at ₹488, reflecting a 0.61% dip from the previous closing price. Over the past year, Coal India Limited (CIL) stock has risen by an impressive 111%, and it has gained 27% since the beginning of the current year.

Coal India accounts for over 80% of domestic coal production, making this foray into non-coal mineral mining a significant diversification.

The successful bid was part of tranche two forward auction held on July 9th by the Ministry of Mines. CIL won the bid with a mining premium of 150.05% of the mineral dispatch value, which will be paid to the state.

The company will receive the letter of intent after depositing performance security, followed by the issuance of a composite license within a year upon meeting tender formalities. This graphite block was part of the second tranche of the critical mine auction.

Coal India, under its diversification strategy, aims to support the domestic market for critical minerals with this acquisition. India imports approximately 69% of its graphite requirements, including natural, synthetic, and end-use products, highlighting the significance of this venture.

Graphite is crucial as an anode material in lithium-ion batteries due to its cost-effectiveness and energy density, essential for electric vehicles and energy storage systems.

With the growing demand for electric vehicles and energy storage, the graphite market is projected to expand significantly, with demand expected to increase by 25-27% by FY35. Coal India had previously indicated its interest in mining critical minerals, aligning with its diversification efforts.

Coal India Limited is an Indian central public sector undertaking under the Ministry of Coal, headquartered in Kolkata. It is the largest government-owned coal producer globally and ranks as the ninth largest employer in India with nearly 272,000 employees.

CIL is also among the top firms contributing significantly to global carbon emissions, underscoring the importance of its diversification into sustainable energy resources.