Coal India Limited’s capex utilisation in H1FY21 highest so far

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October 7, 2020 3:30 AM

For the quarter ending September, the capital outlay was earmarked at Rs 4,179 crore, up from Rs 1,014 crore during the same quarter last fiscal.

“This is a historic high as CIL has not exceeded 30% target utilisation in the first half of any fiscal so far. In the last three years, average capex utilisation has been 20% of the total capex outlaid for the half-yearly period,” a senior company official said.“This is a historic high as CIL has not exceeded 30% target utilisation in the first half of any fiscal so far. In the last three years, average capex utilisation has been 20% of the total capex outlaid for the half-yearly period,” a senior company official said.

Coal India (CIL) has fast-tracked its capital expenditure in line with the coal ministry’s guidance on accelerating capital expenses to achieve considerable growth within the first half of the current fiscal.

Of the Rs 10,000-crore capex for FY21, CIL has already spent Rs 5,023 crore, which is 118% utilisation of its half-yearly target. The company has surpassed the provisioned target of spending Rs 4,247 crore in the first half, recording an all-time high in capex utilisation.

“This is a historic high as CIL has not exceeded 30% target utilisation in the first half of any fiscal so far. In the last three years, average capex utilisation has been 20% of the total capex outlaid for the half-yearly period,” a senior company official said.

The company’s capex utilisation for the half-yearly period this fiscal grew 242% compared with the utilisation during the corresponding period last fiscal. Last fiscal’s half-yearly capital expenditure was only Rs 1,467 crore of the total outlay of Rs 10,000 crore.

For the quarter ending September, the capital outlay was earmarked at Rs 4,179 crore, up from Rs 1,014 crore during the same quarter last fiscal. This registered a whopping 312% growth in capex, while CIL’s utilisation was 118% even during the quarter. The provisioned target of spending during the second quarter of the current fiscal was Rs 3,527 crore.

Through accelerated spending, significant progress has been made in processes like land acquisition, setting up of rail logistics and associated infrastructure and mine development, especially mega mine projects. Compensation for acquisitions were made after the Covid unlock. Major high-value tenders were also concluded on time and heavy earth moving equipment (HEMM) procured.

Purchase of HEMM at Rs 1,360 crore accounted for 27% of the total capex of the half-yearly period. Around 26% of the capex at Rs 1,289 crore was spent for payment of acquisition for mining operations, and 21% of the capex for the period at Rs 1,078 crore was spent on setting up important rail lines. Developing sidings constituted around 21% of the capex at Rs 1,078 crore. All these put together made up for around 74% of the first half’s entire capex.

The components for the rest 26% or Rs 1,297 crore include mine development, coal handling plants, silos, roads, exploration and prospecting, other plant and machinery and joint venture investments.

“Land acquisition has been brought on the fast track. Modernisation of equipment and deployment of it in open-cast mines will pave the way for ramping up of production and productivity. Concurrent development of rail and other logistics will boost evacuation facilities to transport increased output,” an official said.

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