Mounting government pressure to improve performance and buttress a fragile national electricity supply has compelled the miner to sign a recent fuel supply agreement and invest in long-term growth strategies.
“[Coal India] will be investing 40,000 crore in ramping up infrastructure and production for its domestic operations and another 35,000 crore for acquiring foreign assets as well as in its Mozambique operations,”The Economic Times quoted a director of the company.
“We have earmarked 4000 crore budget for urgent ramping up of production. It will go into meeting additional production required to meet supplies under fuel supply agreements according to the presidential directive.”
The company’s production of 436 million tonnes in 2011-2012 is targeted to be increased to 464Mt in 2012-2013 and 556Mt by 2016-2017.
The Economic Times also reported a 24% increase in Coal India’s cash reserves to assist in the production planning.
The news comes as the government rejects speculation of a plan to end the state-run company’s monopoly and open up the Indian coal industry to commercialization.
“Opening up of coal sector for commercial mining is not possible now in the wake of stiff opposition by trade unions and lack of consensus among political parties,” coal minister Sriprakash Jaiswal told Press Trust of India.
“We do not yet have [the] environment for commercial mining of the coal sector.”