Coal India board has approved the establishment of an intermediate holding company in Chile, marking a strategic move into critical minerals such as lithium and copper.

This decision aligns with advancing negotiations between India and Chile for a free trade agreement, which promises enhanced access to vital resources.

Commerce and Industry Minister Piyush Goyal recently indicated that these FTA talks are nearing completion. The pact will open doors for Indian businesses to secure supplies of minerals essential for electronics, automobiles, and solar energy sectors.

Chile boasts substantial reserves of lithium, copper, rhenium, molybdenum, and cobalt. These materials serve as key inputs for high-tech industries, underscoring the strategic importance of Coal India's expansion.

In a regulatory filing, Coal India confirmed it will retain 100 per cent equity in the proposed Chilean entity. The incorporation remains contingent on approvals from the Department of Investment and Public Asset Management (DIPAM) and the Ministry of Coal.

This international foray represents Coal India's first major step beyond traditional coal operations into global critical minerals. It reflects India's broader push for supply chain security amid geopolitical tensions affecting mineral availability.

In parallel, the board sanctioned an equity infusion of ₹3,132.96 crore into a proposed energy joint venture with Damodar Valley Corporation (DVC). This investment contributes to a total indicative project cost of ₹20,886.40 crore, structured on a 70:30 debt-equity ratio.

The DVC joint venture aims to bolster energy infrastructure, leveraging Coal India's expertise in resource development. Officials noted that the funding will support project execution while maintaining fiscal prudence.

Additionally, the board approved ₹3,189.54 crore for its subsidiary, Bharat Coal Gasification and Chemicals Ltd (BCGCL). This capital will fund a coal-to-ammonium nitrate project, enhancing Coal India's diversification into chemicals.

The BCGCL investment covers Coal India's promoter stake in the joint venture. Ammonium nitrate, a critical industrial chemical, finds applications in mining, agriculture, and explosives, aligning with Coal India's operational synergies.

These approvals collectively exceed ₹6,300 crore in investments, signalling robust capital allocation. They underscore Coal India's transformation from a coal-centric firm to a multifaceted energy and minerals player.

The Chilean venture holds particular promise given Chile's dominance in lithium production, vital for electric vehicle batteries. India's domestic lithium needs are surging with its green energy ambitions.

Copper, another focus, remains indispensable for electrification and renewable infrastructure. Securing Chilean supplies could mitigate India's import dependencies from traditional sources.

Regulatory hurdles, including DIPAM and Ministry of Coal nods, must be navigated swiftly. Success here could pave the way for similar overseas expansions by other public sector undertakings.

The DVC infusion addresses India's power demands, where coal-based generation still predominates. The 70:30 ratio balances leverage with equity strength, appealing to investors.

BCGCL's coal gasification program advances India's coal utilisation technologies. Converting coal to ammonium nitrate promotes value addition and reduces raw export reliance.

These board decisions position Coal India as a forward-looking entity. With total investments surpassing ₹6,300 crore, the company eyes sustainable growth amid energy transitions.

As India-Chile FTA talks progress, Coal India's Chile arm could accelerate. This positions the Maharatna firm at the intersection of resources, trade, and national priorities.

Based On PTI Report