Coal India Ltd (CIL) has approved a major step towards expanding beyond its traditional coal business, as the company’s board has cleared the formation of an intermediate holding company in Chile to pursue critical mineral assets such as lithium and copper. This move is being seen as Coal India’s first major international entry into the critical minerals space.

The decision comes at a time when India is actively pushing for stronger supply chain security for minerals that are essential for high-tech industries. The Chile plan also fits into the larger background of India and Chile moving closer to finalising a free trade agreement (FTA), which is expected to improve access to important mineral resources.

Commerce and Industry Minister Piyush Goyal has also recently indicated that the FTA negotiations between India and Chile are nearing completion. The agreement is expected to help Indian businesses get better access to minerals needed for key sectors such as electronics manufacturing, automobile production, and solar energy development.

Chile is known for holding large reserves of lithium and copper, apart from other important minerals such as rhenium, molybdenum, and cobalt. These minerals play a critical role in the supply chain of advanced industries, making Chile an important strategic location for Coal India’s planned expansion.

In a regulatory filing, Coal India confirmed that it will hold complete ownership of the proposed entity. The company stated that it “will retain 100 per cent equity” in the Chile-based intermediate holding company. However, the incorporation of the unit will still depend on approvals from the Department of Investment and Public Asset Management (DIPAM) and the Ministry of Coal.

This move is being viewed as a strategic shift for Coal India, as it reflects the government’s broader push to reduce dependence on global supply chains that are affected by geopolitical tensions. The plan to secure overseas mineral assets is also being linked to India’s increasing demand for lithium and copper, especially due to the country’s green energy and electrification goals.

Lithium remains one of the most critical minerals for the global energy transition, mainly because it is used in electric vehicle batteries. With India’s domestic lithium demand rising sharply, Coal India’s interest in Chile is being seen as a way to secure supplies from one of the world’s key lithium producers.

Copper is another mineral that is central to electrification and renewable energy infrastructure. It is widely used in power transmission, electric vehicles, and clean energy projects. Coal India’s move to explore copper assets in Chile could help reduce India’s import dependency on traditional suppliers.

Along with the Chile initiative, Coal India’s board has also approved other major investments. One of the key decisions includes an equity infusion of ₹3,132.96 crore into a proposed energy joint venture with Damodar Valley Corporation (DVC). This equity investment is part of a larger project, with a total indicative cost of ₹20,886.40 crore.

The overall project cost has been planned with a 70:30 debt-equity ratio, indicating that the funding will be structured carefully to balance borrowing and equity investment. The board decision signals Coal India’s intention to strengthen its role in energy infrastructure development, even as it explores diversification.

Officials have noted that the DVC joint venture is expected to support energy sector expansion and execution of large-scale infrastructure projects. The structure of the investment also highlights Coal India’s attempt to maintain financial discipline while still investing in large projects.

In another major approval, Coal India’s board has cleared ₹3,189.54 crore for its subsidiary Bharat Coal Gasification and Chemicals Ltd (BCGCL). This investment will fund a coal-to-ammonium nitrate project, which is part of the company’s diversification into the chemicals sector.

The funding approved for BCGCL will cover Coal India’s promoter stake in the joint venture. Ammonium nitrate is considered an important industrial chemical and is widely used in mining, agriculture, and explosives. The project is being positioned as a diversification effort that still aligns closely with Coal India’s core operational ecosystem.

With these approvals, Coal India has sanctioned investments exceeding ₹6,300 crore. These board decisions indicate that the company is taking serious steps towards transforming itself from a coal-focused PSU into a more diversified energy and minerals company.

The Chile venture is especially significant because it represents Coal India’s first major move outside India into the global critical minerals market. However, regulatory clearances from DIPAM and the Ministry of Coal will be necessary before the unit can be officially incorporated.

If approvals come through smoothly, this could set the stage for further overseas expansions by Coal India and potentially other Indian public sector undertakings as well.

The DVC investment highlights that coal-based power generation still plays a major role in meeting India’s electricity needs. Meanwhile, the BCGCL coal gasification project supports India’s push to improve coal utilisation technology and promote value addition.

Overall, Coal India’s board approvals show a strong capital allocation strategy aimed at long-term sustainability and growth during the energy transition. As India-Chile FTA talks continue to move forward, Coal India’s Chile-based unit could become a key step in linking trade policy with national resource security priorities.