India's CIL to Invest $855 Million in 2011, and $1 Billion in 2012

---

Researched by Industrial Info Resources (Sugar Land, Texas)--Coal India Limited (CIL) (Kolkata, India), the world's largest coal producer, has earmarked an investment of $855.6 million during fiscal year 2011 and $1 billion in fiscal year 2012.

The major capital expenditures during fiscal year 2011 will be $377 million for acquisition of heavy earthmoving equipment for open-cast mines; $148 million for underground mine equipment; $58 million for mine development; $57 million for exploration and drilling; $48 million for building railway infrastructure; and $48 million for land acquisition.

The government, which wholly owns CIL, has approved the capital expenditures for fiscal years 2011 and 2012, company officials said. The coal mining company's total investments through 2018 have been forecast at $4.2 billion, according to officials who refused to be identified due to mandatory silence on forward-looking statements ahead of CIL's initial public offering.

CIL is planning to float about 630 million shares later this month, through which it plans to raise about $3 billion from the capital markets.

According to commitments given to India's Ministry of Coal, CIL proposes to increase coal production to 460.5 million tons in 2011 and 486.5 million tons in 2012. In 2010, the company's total production of raw coal is estimated to be 395 million tons, accounting for about 81% of total coal produced in India.

To achieve the increased production targets, CIL has 77 projects in hand that entail an aggregate investment of $2.4 billion and will increase the production capacity by 154 million tons. Of these projects, 32 that will add 57 million tons to the company's total capacity will be complete within the current fiscal year.

Company officials said that to cater to the rising demand for beneficiated coal, CIL proposed to undertake construction of 20 beneficiation facilities to process 111 million tons of coal, entailing a total investment of $523 million.

The investment by CIL is against the backdrop of the anticipated acute shortage of coking and thermal coal in India. With a current steel production of 60 million tons, Indian imports 24 million tons of coking coal. According to the Ministry of Steel, even at 100 million-ton production, imports will increase to 70 million tons; if steel production increases to 200 million tons by 2020, imports will increase to 150 million tons. According to the Central Electricity Authority, the Indian regulatory body, imports of power-grade coal will increase 85% to 85 million tons by 2012.

Industrial Info Resources (IIR) is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. IIR's quality-assurance philosophy, the Living Forward Reporting Principle™, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities.