Coal India has an ambitious production target of 875 million tonnes (MT) in FY26, a growth of 12 per cent from 781 MT in FY25. Despite only a marginal rise in production last year, Coal India chairman PM Prasad is confident about the growth prospects and demand during the year even as commercial and captive mines are expanding fast and coal auction prices have remained subdued. In the second part of the interview with Pinak Ghosh from The Telegraph, Coal India chairman points out the strategy and capex plans for the ongoing fiscal.

With commercial and captive mines stepping up production, how confident is Coal India of reaching close to challenging production target of 875 MTs in FY26? What is the strategy on the same?

In fact, commercial and captive miners stepping up production is a step in the interest of the nation as the much needed energy can be produced indigenously. Amid global uncertainties, the foremost priority is to reduce the import of coal which is available in abundance in the country. The private players will supplement CIL’s role rather than substitute it. In FY25 our production was 781 MT. In pursuit of 875 MT target this year, we are confident of getting 14 MT more coal from Mahanadi Coalfields (MCL) over last year. We hope Kusmunda open cast mine of South Eastern Coalfields (SECL) to come back strongly this year with an incremental 20 MT and expect an overall increase of 35 MT from SECL. From Central Coalfields we hope to gain around 15 MT. With other subsidiaries contributing their share we aim to achieve the desired growth.

Coal India’s overall average price realisation per tonne was lower in FY25. E-auction prices were significantly down during the year, even as e-auction volumes were up. What could be the reasons for a downward pressure on prices? What is the tentative e-auction volume for FY26, and will prices continue to remain under pressure this fiscal?

There are two reasons for subdued realizations from e-auctions. First, coal is sufficiently availability in the domestic market and second cooling down of international prices. CIL has asked all its subsidiary companies, except Northern Coalfields, to increase their offer quantity under e-auction to 40 per cent of their respective total production in the first quarter of FY26. This is subject to overall e-auction volumes not exceeding 20 per cent of annual production. In business as usual scenario, normally the markets fetch us a premium of somewhere around 40 per cent in e-auctions. We anticipate it will plateau at the level of around 35-40 per cent.

There are reports that the Coal Exchange could be set up this financial year. What could be the implication for Coal India? Will e-auction volume see a decline?

The exchange will help provide more market access to all the players and help realize the true market price of coal.

There is an ambitious plan for a 100 MT underground coal production by FY35. What could be the challenges to achieving this target? Are there any policy supports that Coal India is looking forward to for achieving this target?

Earlier the challenges were loss incurring underground mines, lack of skilled labour, unavailability of indigenous equipment makers and departmental production cost being high. The situation has improved now. What makes underground mining workable now is well trained skilled operators, outsourcing, and proliferation of mass production technologies for coal extraction at low cost through existing infrastructure. To begin with we are aiming at 70 MT underground output by 2030 and step it up further.

What is Coal India’s capex plan for FY26? How would this capex be spent?

Capex plan is ₹16,000 crore for FY26. If required, we may scale it up. Coal transportation and evacuation infrastructure which includes setting up rail sidings and corridors; coal handling plants/silos; and roads account for 35 per cent at ₹5622 crore. Land, a major capex head is next at ₹2382 crore. Heavy earth moving equipment, washeries, and other plant and machinery make up ₹1952 crore. Other heads like mine development, solar, JVs and pithead power plants consume the remaining capex.