Coal India Ltd (CIL)‘s continued investment in evacuation infrastructure, land, and mining machinery, has seen capital expenditure grow 8.5 per cent on-year to Rs 4,700 crore in the April-July period of FY 2024.

Capex utilisation during the period was nearly 100 per cent of the progressive target of Rs 4,754 crore and 28.3 per cent of the annual target of Rs 16,600 crore.

Typically, capex starts slow in the first quarter, with the company laying out expenditures plans at the beginning of the fiscal, and gradually building it up in the subsequent quarters, it said, adding that “What makes the 8.5 per cent capex growth was it came on a high base of Rs 4,332 crore in the same period of FY 2023, the year when CIL’s capex peaked to an all-time high of Rs 18,619 crore.

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“At a time when the Centre has been directing CPSEs to scale up their capital expenditure for economic revival, CIL has stepped up its capex three-fold or 197 per cent in a span of three years. From Rs 6,270 crore in FY 2020, capex has shot up sharply to Rs 18,619 crore in FY 2023,” said a senior CIL official.

Land was the major expenditure head at Rs 1,311 crore, accounting for 28 per cent of the total capex spend. This was closely followed by procurement of heavy earth moving machinery that took up Rs 1,083 crore or 23 per cent.

Land acquisition and strengthening the modernised mining fleet are twin essentials for sustaining the production tempo, especially when the company is faced with stiff targets. Capex on construction of rail sidings and rail corridors and coal handling plants and silos, for faster evacuation of coal, was Rs 664 crore and Rs 572 crore respectively.

Underscoring the company’s resolve to shore up evacuation infrastructure, the budgeted provision for construction of rail sidings and corridors at Rs 4,169 crore is the highest among the capital expenditure heads for the entire fiscal, the company said.

For land acquisition a totalof Rs 2,907 crore was identified for the ongoing fiscal year.

“Our production is poised to increase substantially in the ensuing years and it is vital to align it with seamless coal transportation. This necessitates heavy investment in coal evacuation infrastructure and first mile connectivity projects with CHP/silo combination”, said the official.