Coal India stock surges after Cabinet Committee greenlights company’s multi-billion investment in Coal-to-Gas Projects

The Cabinet Committee on Economic Affairs (CCEA) granted approval on Wednesday for Coal India Limited’s ambitious venture into the coal-to-synthetic natural gas (SNG) and coal-to-ammonium nitrate projects. The joint ventures, in collaboration with GAIL and Bhel respectively, aim to tap into the vast coal reserves of Eastern Coalfields Limited in Bengal and Mahanadi Coalfields in Odisha.

The first project, a Rs 13,052 crore syngas initiative, is slated for development at the Sonepur Bazari Area of Eastern Coalfields in Burdwan district, Bengal. Simultaneously, the CCEA greenlit a Rs 11,782.05 crore coal-to-ammonium nitrate project at Jharsaguda, Odisha, in partnership with Bhel. Coal India envisions investing an estimated equity amount ranging from Rs 3,651 to Rs 3,800 crore in both joint ventures.

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With the goal of achieving 100MT coal gasification by 2030, Coal India will spearhead the establishment of two coal gasification plants, marking a significant stride towards cleaner energy production.

In a parallel move, the government approved a substantial financial assistance outlay of Rs 8,500 crore to promote coal and lignite gasification projects. Viability gap funding will be extended to projects initiated by Public Sector Undertakings (PSUs), PSU Joint Ventures (JVs), private sector entities, and research and development organizations. The allocated incentives are categorized as Rs 4,050 crore for category one, Rs 3,850 crore for category two, and Rs 600 crore for category three.

As of 10:11 am, Coal India’s shares were trading nearly 2% lower at ₹390.05, reflecting the market’s response to the strategic investment announcement