Coal India Limited Diversifies Operations with Overseas Acquisition

1 Aug 2023 , 02:56 PM

Coal India Limited (CIL) takes a bold step to diversify its operations and integrate further into the value chain. The company targets the acquisition of lithium, cobalt, and nickel assets abroad.

CIL recently amended its Memorandum of Association (MoA) to include non-ferrous and critical minerals, showcasing its commitment to expanding its presence in new sectors.

In the past, CIL’s attempts to acquire coal assets overseas were unsuccessful. Now, the company is actively identifying suitable opportunities for mergers and acquisitions to secure critical minerals.

The move aligns with CIL’s vision to ensure a steady supply of these minerals to support India’s Atmanirbhar mission (self-reliance).

The Ministry of Mines created Khanij Bidesh India Ltd (KABIL) in 2022 as a joint venture with NALCO, Hindustan Copper Ltd, and Mineral Exploration Corporation Ltd (MECL). KABIL’s mandate is to identify and acquire overseas mineral assets of strategic importance, including lithium and cobalt.

CIL has proposed a capital expenditure of Rs 16,600 crore in 2023-24. A significant portion of this investment will be allocated to diversification projects, such as solar power, thermal power plants, fertilizer plant revival, surface coal gasification, and coal bed methane.

CIL signed two Memorandums of Understanding (MoUs) for its foray into the thermal power business. Joint venture with Madhya Pradesh Power Generating Company Limited (MPPGCL) for a 1×660 MW Supercritical thermal power station in Chachai, Madhya Pradesh.

Setting up a 2×800 MW Supercritical thermal power plant in Odisha through Mahanadi Basin Power Limited (MBPL), a subsidiary of Mahanadi Coalfields Limited (MCL). Another MoU with Assam Power Distribution Company Limited (APDCL) for the purchase of 1,200 MW from the proposed MBPL Power Plant.

CIL established joint ventures (JVs) with key entities like NTPC, IOCL, GAIL, and RCF to mitigate risks associated with diversification projects and leverage partners’ expertise.

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