Coal India's April-December capex up 37% at Rs 10,717 cr

Coal India Limited (CIL) has incurred a capex of Rs 10,717 crore till December of the ongoing financial year clocking a 37.4% year-on-year growth. Capex during April-December’20 was Rs 7,801 crore.

The capex scale up comes at a time when the Centre has been exhorting the public sector entities to step up their annual capex, a senior company executive said.

CIL’s capex spend during the referred period marks 86.3% of the target achievement.

Capex is a key performance area which has a weightage value of 15% in performance evaluation under Memorandum of Understanding (MoU). CIL signs MoU with the Ministry of Coal at the beginning of every financial year.

“Our endeavour is to keep abreast of our capex targets. However, capex will be contingent on the demand for coal, sales realization, and production needs. The investments will be made accordingly,” the executive said.

The three major heads at Rs 5,786 crore that accounted for 54% of the total capex during April-December’21 were land acquisition, procurement of heavy earth moving machinery (HEMM) and joint ventures - primarily Hindustan Urvarak Rasayan Ltd and Talcher Fertilizers Ltd.

Construction of coal handling plants, silos with Rs 1,344 crore and rail sidings and rail corridors at Rs 1,785 crore made up for 29% of CIL’s entire capex during the first nine months of the fiscal. CIL is focusing on increasing its evacuation capacity through rail mode by an additional 330 million tonnes per annum by FY 2024 through strengthening of its rail infrastructure.

Capital expenditure on land acquisition at Rs 2,490 crore, crucial for developing new and expansion mines achieved 121% of the progressive target by the end of December’21. The target for the period was fixed at Rs 2,057 crore. Growth compared to last year same period was 54% under this head.

Procurement of HEMM at Rs 2,031 crore exceeded the progressive target of Rs 1,783 crore by 14% during this period. CIL Primarily deployed in opencast mines, the major source of the company’s coal production, these machines would help in removal of overburden and ramp up the coal output.