Coal India Limited's (CIL) capital expenditure (capex) clocked an 8.5 percent year-on-year growth at Rs 4,700 crore in the first four months (April-July) of FY 24, the central public sector undertaking (CPSU) said on August 16.
"CIL continues to invest heavily on evacuation infrastructure, land, and mining machinery. The capex utilisation during the referred period was nearly 100 percent of the progressive target of Rs 4,754 crore and 28.3 percent of annual target of Rs 16,600 crore of FY 2024," a CIL spokesperson 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.
Growth despite high base
What makes the 8.5-percent capex growth in the April-July period FY 2024 significant was it came over a high base of Rs 4,332 crore for the same period in FY 2023, the year when CIL’s capex peaked to an all-time high of Rs 18,619 crore.
“At a time when the Centre has been directing the CPSEs to scale up their capital expenditure for economic revival, CIL in a span of three years has stepped up its capex by three fold or 197 percent. From Rs 6,270 crore in FY 2020 the capex shot up sharply to Rs 18,619 crore in FY 2023,” said a senior official of CIL.
Capex breakup
Land was the major expenditure head at Rs 1,311 crore, accounting for 28 percent of the total capex spend for the four-month period. This was closely followed by the procurement of heavy earth moving machinery (HEMM) that took up Rs 1,083 crore or 23 percent.
Land acquisition and strengthening the modernised mining fleet are twin essentials for sustaining the production tempo, especially when the company is faced with stiff targets, it said in a statement.
Capex on construction of rail sidings and rail corridors, and coal handling plants (CHPs) 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, the budgeted provision for construction of rail sidings and corridors is pegged at Rs 4,169 crore, 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 CHPs and silos is pegged at Rs 2,174 crore, procurement of HEMM would take up Rs 1,965 crore in FY 2024. Rest would be on other heads such as 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,” said the official.
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