Coal India Limited (CIL)’s capital expenditure increased by 8.5 per cent on-year to Rs 4700 crore during April-July 2024 period, with the company continuing to invest heavily in  evacuation infrastructure, land, and mining machinery. “The capex utilization during the referred period was nearly 100 per cent of the progressive target of Rs 4754 crore and 28.3 per cent of annual target of Rs 16,600 crore of FY2024,” CIL said in a regulatory filing.

Typically, the capex starts slow in the first quarter with the company laying out the expenditures plans at the beginning of the fiscal and gradually builds up in the subsequent quarters. The 8.5 per cent capex growth in April-July FY2024 period was significant as it came over a high base of Rs 4332 crore of the same period FY2023. This was 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 per cent. From Rs 6270 crore in FY 2020 the capex shot up sharply to Rs 18,619 crore in FY 2023,” said a senior official of CIL.

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Land was the major expenditure head at Rs 1311 crore and it accounted 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 that took up Rs 1083 crores or 23 per cent.

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. The budgeted provision for construction of rail sidings and corridors at Rs 4169 crore is the highest among the capital expenditure heads for entire FY 2024.

For land acquisition, a total amount of Rs 2907 crore was identified for the ongoing fiscal year. While construction of CHPs/Silos is pegged at Rs 2174 crore, procurement of HEMM would take up Rs 1965 crore in FY 2024. 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,” said the official.