Coal India’s capex growth zooms two fold to Rs 1,840 crore in Q1

By: |
August 21, 2021 4:30 AM

CIL has pegged its capex target at Rs 17,000 crore for FY22, a 28% increase over the actual capital expenditure of Rs 13,284 during in FY21.

During FY21, CIL had a revised capex target of Rs 13,000 crore despite pandemic, which exceeded by Rs 284 crore.During FY21, CIL had a revised capex target of Rs 13,000 crore despite pandemic, which exceeded by Rs 284 crore.

As Coal India (CIL) steps up investment, its growth in capital expenditure during the first quarter of the fiscal more than doubled at 118% to Rs 1,840 crore from Rs 844 crore during the same quarter last fiscal . The PSU miner in the current quarter has made investments in creating a better evacuation infrastructure, land acquisition for expansion of mines and procuring heavy equipment for enhancing production, with a target to be a net zero company by 2024.

CIL has pegged its capex target at Rs 17,000 crore for FY22, a 28% increase over the actual capital expenditure of Rs 13,284 during in FY21.

Though on a quarter to quarter comparison CIL’s capex has more than doubled, it has achieved 94% of the progressive target of Rs 1,960 crore set for April-June quarter of the ongoing fiscal.

CIL’s growth in capex during the first quarter has mainly happened on account of infrastructure spending like setting up rail sidings and corridors, coal handling plants, (CHP), silos and haul roads, which has given a quantum leap to spending over the first quarter of FY21.

CIL has spent Rs 504 crore on this account during the first quarter this fiscal against Rs 241 crore during the corresponding period last fiscal. Spending on infrastructure was the second highest among all capex heads.

Procurement of heavy earth-moving machinery, plant and other machinery that would help in ramping up output through open cast mines topped the capex list at Rs 670 crore, while land acquisition accounted for Rs 268 crore.

“Our focus is to have a seamless coal evacuation process in future when production increases. CHP/Silo loading will save us considerable expenses, apart from having environmental benefits,” a CIL executive said, adding rail sidings and lines are being dovetailed with CHPs and silos and the company aims to move around 415 MT of coal through mechanised means through 35 first mile connectivity projects by FY24.

During FY21, CIL had a revised capex target of Rs 13,000 crore despite pandemic, which exceeded by Rs 284 crore.

Of the targeted capex for entire FY22, evacuation infrastructure leads the list with more than one-third at nearly Rs 5,950 crore. Other major heads are HEMM, plant and machinery with Rs 3,560 crore.

Joint venture projects including Talcher Fertilizers and Hindustan Urvarak & Rasayan, solar and others to make up at around Rs 3,200 crore and land acquisition at Rs 2,700 crore, the executive said, adding, “CIL’s capex will be contingent on the demand for coal and production needs. The investments will be made accordingly”.

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