BackCoal India’s capex up 33% in Apr-Sep to ₹7,017 cr; firms up evacuation plan
To align increasing production with robust transportation logistics CIL is fast tracking the development of its coal evacuation system. This would help in handling the seamless movement of coal in future
PremiumNEW DELHI: State-owned Coal India on Wednesday reported a 33% increase in its capital expenditure to ₹7,017 crore during the first half of FY23. During the same period last financial year, the company had reported a capex of ₹5,300 crore.
“The growth came on the tailwinds of expenditure pumped into the expansion of coal evacuation infrastructure," Coal India said in a statement.
Two coal evacuation infrastructure heads--setting up of coal handling plants (CHP)/silos and railways lines, combined--accounted for 36%, or ₹2,547 crore, of CIL’s total capex for the six months ended September 2022.
“Capex push is essential for long term growth prospects. To align increasing production with robust transportation logistics CIL is fast tracking the development of its coal evacuation system. This would help in handling the seamless movement of coal in future," said a senior executive of CIL.
During the referred period, capital expenditure on coal evacuation projects pipped the heads of land acquisition and procurement of heavy earth moving machinery (HEMM) which conventionally comprise the bulk of the capex.
Construction of CHPs/silos under first mile connectivity was the major capex head at ₹1,489 crore in H1 of FY23 with an increase of 2.4 times compared to ₹614 crore of corresponding period year ago.
“This underscores CIL’s intent to put in place a strong coal transportation infrastructure to move greater quantities of coal in future. Most of the expenditure was incurred by CIL’s three subsidiaries MCL, NCL and SECL," the statement said.
Laying rails corridors and rail sidings was the next major head where the capital expenditure rose to ₹1,058 crore with an upsurge of 33%. Capex under this head during the first half of the last financial year was ₹793 crores. SECL accounted for more than 56% at ₹589 crores.
The capex which was ₹6,270 crore in FY20 has improved significantly in recent years. The current fiscal’s H1 capex was 12% more than that of the entire year’s capex of FY20. CIL is likely to close FY23 with ₹16,500 crore which would represent a 2.6x capex jump in a span of three years.
Expenditure on land and HEMM followed with ₹1,056 crore and ₹618 crore, respectively.
“It is essential that concurrent with production capex is also hiked up to sustain the growth momentum. We have increased our capex on introduction of modernized fleet and laying new rail lines which are catalysts for output and off-take growth", said the executive.
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