Coal India’s capex rises 65% in April-June

NEW DELHI: State-owned miner Coal India on Monday reported a 65% year-on-year jump in its capital expenditure (capex) to ₹3,034 crore during the April-June quarter. This was the ninth consecutive month of capex growth, the company said in a statement.

“CIL’s capex jumped to ₹3,034 crore during April-June’22 compared to Rs.1,841 crore of April-June’21 resulting in a sizeable Rs. 1,193 crore volume increase,” it said.

A senior official with the company said that the capex increase came on the back of a strong spending in acquiring land and strengthening transport infrastructure in our coalfields under first mile connectivity projects.

“These two vital areas help CIL in expanding its mining operations for accelerated production and pairing it with seamless transportation of coal,” the official said.

Land acquisition at ₹608 crore accounted for nearly one-fifth of the first quarter’s total capex basket. This represents close to 2.3 fold increase compared to ₹268 crore spent for land acquisition during April-June FY22. The expenditure was spread across all the subsidiaries of Coal India.

Capex under first-mile connectivity projects, on construction of coal handling plants, silos including weighbridges totalled to ₹577 crore during the quarter under review. It is a four-fold increase compared to ₹141 crore spent in Q1 of last financial year.

Rail sidings and laying of rail corridors took up ₹571 crore during Q1 FY23 clocking 57% growth. During the same quarter last fiscal, the expenditure was ₹363 crore.

Both the evacuation logistics projects put together at ₹1,148 crore accounted for more than one-third or 38% of the total capex of ₹3,034 crore of the first quarter.

Capital expenditure on Hindustan Urvarak Rasayan Limited and Talcher Fertilizers Limited which was ₹518 crore. HURL’s Gorakhpur plant has already started the production whereas Sindri and Barauni plants will become operational during the fiscal, the statement said.

“CIL’s production tempo is keeping up a consistent double-digit growth in FY23 so far and all efforts are on to continue the trend. What assumes importance is to have a matching evacuation infrastructure that can handle transportation of the increased output”, said the executive.

Even during Covid-19 slowdown CIL’s capex spending witnessed steady quarter wise increase, according to the company.