Coal India capex grows 8.5% to ₹4,700 crore in April-July

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Coal India Ltd. (CIL) on Wednesday reported an 8.5% rise in its capital expenditure in the first four months of the current financial year (FY24) at ₹4,700 crore. The capex utilization during the period under review was nearly 100% of the progressive target of ₹4,754 crore and 28.3% of annual goal of ₹16,600 crore for the current fiscal.

Note that this 8.5% growth in capex for April-July is built upon a high base of ₹4,332 crore achieved in the corresponding period of FY23, the year when CIL's capex hit a record ₹18,619 crore. Typically, capex starts at a slow pace in the first quarter with the company laying out the expenditures plans at the beginning of the fiscal, and gradually builds up in subsequent quarters. “At a time when the Centre has been directing the CPSEs (Central Public Sector Enterprises) 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%.

From ₹6,270 crore in FY 2020 the capex shot up sharply to Rs.18,619 crore in FY2023," said a senior official at CIL. In April-July 2023, the primary expenditure was on land, costing ₹1,311 crore, which constituted 28% of the total capex. This was followed by an investment of ₹1,083 crore, or 23%, on the acquisition of heavy earth-moving machinery.

Land acquisition and strengthening the modernized mining fleet are twin essentials for sustaining the production momentum, especially when the company is faced with stiff targets. In the last quarter, investments in the construction of rail sidings, corridors, coal handling plants, and silos, aimed at expediting coal evacuation, stood at ₹664 crore and ₹572 crore, respectively. The allocation for land acquisition for the ongoing fiscal year is