Coal India plans nearly ₹1 trillion for coal logistics and gasification

Infrastructure built for 1 billion tonnes

Coal India Ltd plans to commit nearly ₹1 trillion to coal logistics and gasification as the state-run miner prepares to raise annual production from about 770 million tonnes to 1 billion tonnes by fiscal year 2030. Chairman and managing director B. Sairam told Mint that nearly ₹48,000 crore would go into rail connectivity and mechanized coal evacuation, while ₹50,000 crore would be invested with joint-venture partners in three gasification projects.

The expansion has national significance because Coal India supplies more than 80% of India's coal production. India consumes 1.2-1.3 billion tonnes annually, and coal represents about 70% of the country's energy mix. Roughly 65% of the company's output already moves through Indian Railways, making transport capacity a central constraint on further production growth.

Coal India's logistics programme includes 72 first-mile connectivity projects intended to mechanize evacuation and reduce road transport. According to Mint, they will add 994 million tonnes of annual handling capacity at a cost of about ₹24,560 crore by FY2030. Existing first-mile connectivity capacity is 432 million tonnes.

Rail links target mining bottlenecks

The company is also developing seven major railway links covering 553 km, with investment of approximately ₹23,463 crore alongside Indian Railways and the state governments of Odisha, Chhattisgarh and Jharkhand. Four projects spanning 307 km have been completed or partly commissioned.

The programme includes the first phase of Chhattisgarh East Rail Ltd, covering the Kharsia-Dharmjaigarh line, three feeder lines and a spur to Gare-Pelma. It also covers planned doubling of the Jharsuguda-Barpali Sardega line in Odisha, tripling of the Tori-Shivpur route in Jharkhand and development of the Gevra Road-Pendra Road connection in Chhattisgarh.

These projects are meant to align mine output with dispatch capacity. Without additional loading and rail infrastructure, higher production would risk accumulating at mines rather than reaching power generators and industrial consumers.

Higher costs meet a pricing constraint

The investment programme is advancing while Coal India absorbs a sharp increase in operating expenses. Sairam said industrial diesel used in mining and logistics rose from the retail benchmark of about ₹92 per litre to as much as ₹155 per litre by the end of May before moderating. The company consumes about 400,000 kilolitres of diesel annually.

Ammonium nitrate, used in mining explosives, has increased by as much as 70% since February to more than ₹72,000 per tonne. Coal India consumes 8 million tonnes annually, compared with stated Indian production of 12 million tonnes. Sairam said the company had not passed these increases on through higher coal prices.

Pricing remains politically and economically sensitive because coal is a major input for electricity, steel and aluminium. Coal and lignite have a weight of about 0.7% in India's wholesale price index, while electricity, about 70% of which is coal-generated, has a 14% weight. Coal India last increased coking and non-coking coal prices by ₹10 per tonne from 16 April 2025. Sairam said no further revision was under consideration, although six mines with combined capacity of 40 million tonnes are borderline viable and would benefit from higher prices.

Gasification and minerals broaden the portfolio

Coal India plans to invest ₹50,000 crore with Bharat Heavy Electricals Ltd, GAIL (India) Ltd and Bharat Petroleum Corp. Ltd in its first three coal gasification ventures. Groundbreaking has taken place at one project; the other two are at the detailed-project-report and tendering stages. The company is also discussing additional plants with Chhattisgarh, Odisha and Maharashtra.

Beyond coal, the miner has acquired five domestic critical-mineral blocks and expects its first to enter commercial production within two years. The Oranga-Revatipur graphite block in Chhattisgarh is at an advanced stage. Coal India is also evaluating assets in Chile, Argentina and Australia, including a possible stake in a Chilean lithium asset, and has established a Singapore subsidiary to manage overseas opportunities.