Coal India Ltd's capital expenditure rose 8.5 per cent during April-July this fiscal to Rs 4,700 crore as it continued to invest heavily in evacuation infrastructure, land, and mining machinery, officials said.
The capex spend during the first four months of the current fiscal year that started in April, was almost 100 per cent of the target of Rs 4,754 crore and 28.3 per cent of the annual target of Rs 16,600 crore (for 2023-24 fiscal), they said.
Typically, the capex starts slow in the first quarter with the company laying out the expenditure plans at the beginning of the fiscal and gradually builds up in the subsequent quarters.
What makes the 8.5 per cent capex growth in April-July FY24 significant was it came over a high base of Rs 4,332 crore of same period in FY2023, the year when CIL's capex peaked to an all-time high of Rs 18,619 crore.
"At a time when the government has been directing the central public sector units to scale up their capital expenditure for economic revival, CIL in a span of three years has stepped up its capex by three fold (197 per cent). From Rs 6,270 crore in FY 2020, the capex shot up sharply to Rs 18,619 crore in FY 2023 (April 2022 to March 2023)," said a senior official of the world's largest coal miner.
Land was the major expenditure head at Rs 1,311 crore, accounting for 28 per cent of the total capex spend of April-July 2023. This was closely followed by the procurement of heavy earth moving machinery (HEMM) that took up Rs 1,083 crore or 23 per cent.
Land acquisition and strengthening the modernized mining fleet are twin essentials for sustaining the production tempo, especially when the company is faced with stiff targets.
Capex on construction of rail sidings and rail corridors and coal handling plants and silos, for faster evacuation of coal, was Rs 664 crore and Rs 572 crore, respectively.
Underscoring the company's resolve to shore up evacuation infrastructure CIL said the budgeted provision for construction of rail sidings and corridors at Rs 4,169 crore is the highest among the capital expenditure heads for entire FY 2024.
For land acquisition, a total amount of Rs 2,907 crore was identified for the ongoing fiscal year. While construction of coal handling plants (CHPs)/silos is pegged at Rs 2,174 crore, procurement of HEMM would take up Rs 1,965 crore in FY24. Rest would be on other heads like plant and machinery, solar projects, JVs and coal washeries.
"Our production is poised to increase substantially in the ensuing years and it is vital to align it with seamless coal transportation. This necessitates heavy investment in coal evacuation infrastructure and first mile connectivity projects with CHP/silo combination," the official said.
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