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State-run miner Coal India on Tuesday said its capital expenditure increased by 7.6 per cent year-on-year at ₹10,492 crore during the first eight months of the current financial year, hoping to exceed this year’s target.
From April to November last fiscal, capital expenditure of the world’s largest coal miner stood at ₹9,751 crore.
“We are striving to achieve around 80 per cent of the current financial year’s total targeted capex of ₹16,500 crore by the third quarter ending December,” said a senior executive of Coal India.
CIL’s intensified focus on strengthening coal evacuation infrastructure in its mining areas saw capex under the three heads going up to ₹3,247 crore, representing 31 per cent of the entire capex, till November 2023, according to a stock exchange filing.
Setting up railway sidings and corridors at ₹1,842 crore, construction of coal handling plants (CHPs) and silos for mechanised transportation of coal, including weighbridges at ₹1,292 crore and establishing roads amounting to ₹113 crore, cumulatively, made up ₹3,247-crore capital expenditure.
Major capex heads
Capex on acquisition of land and related rehabilitation followed at ₹2,486 crore, accounting for almost a quarter during April-November of financial year 2023-24.
Procurement of heavy earth moving machinery (HEMM) reported ₹1,954 crore. Diversification and joint ventures such as solar and Hindustan Urvarak Rasayan and Talcher Fertilizers together made up ₹1,040 crore. The remaining capex heads were mine development, exploration, prospecting, ERP and other residuals.
“Land and HEMM are major capex heads that catalyse production growth. Having a robust coal evacuation infrastructure to transport increased volumes of coal in future is a priority where we are upping investments. Capital expenditure is important for asset creation and future revenue” said the CIL executive.
For FY24, as in the previous financial year, the bulk of CIL’s capex is focused on the three transport infrastructure projects. Together these heads add up to ₹6,441 crore out of the fiscal’s targeted capex of ₹16,500 crore.
CIL’s capital expenditure, which used to hover between ₹6,000-7,000 crore, took off sharply in FY22 to ₹13,284 crore doubling over FY21 level. Since then, the growth curve remained steady. During three successive financial years till FY23, the coal miner’s capex exceeded the budgeted target, which was a record of its own, the company said in the stock exchange filing.
“Capex usually surges up in the last quarter, and CIL hopes to exceed this fiscal’s target as well, making it fourth year on the trot,” it added.
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