Coal India’s Capex soars 33% to Rs.7,027 Crs in H1 FY’23

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Bhubaneswar : Public sector coal mining giant Coal India’s (CIL) Capex soared by 33% in first half of the current fiscal year, compared to H1 FY’22. The growth came on the tailwinds of expenditure pumped into the expansion of coal evacuation infrastructure. The capex of Rs.7,027 Crores during April-September ‘22 surpassed Rs.5,300 Crores of comparative period last year by Rs.1,727 Crores posting 33% growth. The two coal evacuation infrastructure heads, setting up of coal handling plants (CHP)/silos and railways lines, combined, accounted for 36% or Rs.2,547 Crores of CIL’s total capex ending September FY’23.

“Capex push is essential for long term growth prospects. To align the 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 Rs.1,489 Crores in H1 FY’23 with an increase of 2.4 times compared to Rs.614 Crores 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. Laying rails corridors and rail sidings was the next major head where the capital expenditure has risen to Rs.1,058 Crores with an upsurge of 33%. Capex under this head during H1 of the last financial year was Rs.793 Crores. SECL accounted for more than 56% at Rs. 589 Crores. The capex which was Rs. 6,270 Crores in FY’20 has improved significantly in recent years. The current fiscal’s H1 capex was 12% more than that of the entire year’s capex of FY’20. CIL is likely to close FY’23 with Rs.16,500 Crores which would represent a 2.6X capex jump in a span of three years. Expenditure on land and HEMM followed with Rs. 1,056 Crores and Rs. 618 Crores 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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