Coal India aims to rejoin dividend list as ECL improves performance

State-owned Coal India aims to eliminate Rs 2,200 crore in accumulated losses at its subsidiary, Eastern Coalfields Ltd (ECL), and plans to rejoin the dividend list by FY 2025-26, according to a top official. During the foundation day event, Coal India Chairman P.M. Prasad mentioned that another previously loss-making subsidiary, Bharat Coking Coal Ltd, has already returned to the dividend list. He expressed confidence that ECL would achieve similar success by FY 2025-26. Coal India operates seven coal-producing subsidiaries.

“ECL is performing well and is on track to meet its production target of 54 million tonnes this year. We expect to eliminate two-thirds of its Rs 2,200 crore accumulated losses this fiscal year, with the remaining losses cleared by the following year, allowing it to rejoin the dividend list,” Prasad said.

He added that the next 3-4 months would present challenges for production due to monsoon impacts on growth. However, Coal India remains on track to achieve its overall production target of 773 million tonnes this fiscal, despite a year-on-year production increase of only 2.3 percent in October.

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Mr. Prasad also highlighted the potential of the Gevra mine under South Eastern Coalfields, which is set to become the world’s largest with a production target of 70 million tonnes in two years. Gevra’s current production stands at 59 million tonnes, with a target of 61-62 million tonnes for FY’25. By 2030, Coal India aims to boost underground production to 70 million tonnes, up from the current fiscal target of 34 million tonnes. FY’24 underground production was 28 million tonnes.

Prasad said if Coal India can increase its production by 50-60 million tonnes, it would significantly reduce thermal coal imports, which currently strain forex reserves.

The company’s overall production target is 1 billion tonnes by FY 2026-27. He emphasized Coal India’s aggressive focus on first-mile connectivity, aiming to eliminate overloading and underloading issues, which cost the company Rs 150-200 crore.

“We plan to add 150-200 km of connectivity annually. Once we reach the 900 million tonne level, both overloading, which affects railways, and underloading, which causes Rs 150-200 crore in losses, will be eliminated,” Prasad said.

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