- 20 Jun 2024
- ICICI Securities
COAL INDIA AWARDED 23 ABANDONED UNDERGROUND COAL MINES TO PRIVATE OPERATORS
COALINDIA - 399 Change: -0.40 (-0.10 %)News: In order to tap the coal reserves from closed and discontinued underground mines, Coal India has awarded 23 of its such mines to private sector bidders under a revenue sharing model. The cumulative peak rated capacity of these mines is 34.14 million tonnes (MT) per annum with total extractable reserves estimated at 635 MT. For coal sold specifically for coal gasification or coal liquefaction purpose, operators will be provided 50% of contracted percentage of revenue share from the authority.
Views: The strategic move to re operate abandoned mines through private operators using revenue sharing models is likely to support the company’s volume and topline growth going forward. This approach also brings cost efficiency by utilizing existing infrastructure. We maintain a positive view on Coal India, driven by the company’s ambitious target of achieving 1000 MT of coal production by FY26, robust demand from the power sector, investments in new technology domains such as coal gasification, inexpensive valuation, and healthy dividend yield.
Impact: Positive