Coal India Limited (CIL), the largest miner in India, has revealed plans for a substantial capital expenditure (capex) of Rs 80,000 crore over the next five years. The company aims to escalate its production to one billion tonnes annually by the fiscal year 2026 and has outlined diversification strategies, including ventures into thermal and renewable power generation, as stated by chairman and managing director (CMD) PM Prasad.

During post-earnings call on November 21, Prasad emphasized the persistent high demand for coal in India, surpassing projections by the Ministry of Power. He affirmed coal's enduring significance in the Indian context until 2040, highlighting CIL's consolidated capex target of Rs 80,000 crore for the upcoming five years.

In the previous fiscal year (FY23), CIL exceeded its capex goal, recording Rs 18,619 crore against the targeted Rs 16,500 crore. For the first half of FY24 (April to September), the company's capex reached Rs 7,739 crore, with a full-year target of Rs 16,500 crore.

CIL has set an ambitious production goal of one billion tonnes for FY26, with a current target of 780 million tonnes (MT) for FY24, achieving almost half of this in the initial seven months. Anticipating a 9% production increase for the next year, the company is investing in infrastructure, particularly in first-mile connectivity and railway facilities, to support the projected rise in volumes.

Prasad outlined CIL's anticipation of e-auction sales contributing nearly 15% of its total production, up from the current 9%. However, he cautioned that this proportion would be contingent on the allocation to the power sector, given the unprecedented surge in demand.

Despite Coal India's stock gaining close to 50% in 2023, it experienced a recent decline following its dividend announcement. On November 21, the stock closed lower, registering a nearly 1% decrease from the previous day, trading at Rs 331.25 on the National Stock Exchange at 1:44 pm.