Coal India’s shares jumped over 2% on Thursday’s trading session after the mining company announced receiving approval from the Cabinet for equity investment to set up coal gasification projects with GAIL and Bharat Heavy Electricals Limited (BHEL).
Coal India’s shares hit an intraday high of Rs 391.70, 2.38% higher than its previous closing price on the National Stock Exchange (NSE). The stock closed 1.88% higher at Rs 389.80.
The Cabinet Committee on Economic Affairs (CCEA), chaired by PM Narendra Modi, approved the proposal for equity investment by Coal India for setting up a coal-to-synthetic natural gas (SNG) project through a joint venture with GAIL and a coal-to-ammonium nitrate project through a venture with BHEL.
Coal India Ltd will set up the two coal gasification plants to achieve the target of 100 million tonnes of coal gasification by 2030 and to fulfil India’s dual objectives of self-reliance and energy independence.
For the first project, a joint venture between Coal India and GAIL will establish a Coal-to-SNG project at the Sonepur Bazari Area of Eastern Coalfields Limited in the Burdwan district of West Bengal at an estimated project cost of Rs.13,052.81 crore, considering a debt to equity ratio of up to 70:30. Coal India will invest Rs 1,997.08 crore for 51% in the JV.
A JV of Coal India and BHEL will set up a Coal-to-Ammonium Nitrate Project at Lakhanpur Area of Mahanadi Coalfields Ltd in Jharsuguda district of Odisha at an estimated project cost of Rs.11,782.05 crore considering a similar debt to equity ratio. Coal India will invest Rs 1,802.56 crore for 51% in the JV. All figures approved by the Cabinet are expected at ± 25%.