Saturday, May 14, 2022

Coal India sees record growth in capex in FY22 at Rs 14,834 crore

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  • The capex increase was up by a sharp Rs 1,550 crore in FY22 as compared to Rs 13,284 crore incurred in FY21, registering a near 12 percent growth
  • Land and HEMM combined accounted for 40 percent of the total capex at Rs 5,967 crore

New Delhi: At a time when the centre is exhorting the PSUs of the country to frontload their capital expenditure to spur economic growth, Coal India Limited (CIL) has incurred capital expenditure (capex) of Rs 14,834 crore in FY22, the highest so far, said CIL in a statement on Tuesday. Going past the MoU target of Rs 14,695 crore, this represents a 101 percent achievement on CIL's part, it said. It is for the second consecutive fiscal that CIL has bettered its capex target, which is a record of its own, the statement added.

The capex increase was up by a sharp Rs 1,550 crore in FY22 as compared to Rs 13,284 crore incurred in FY21, registering a near 12 percent growth. CIL’s FY21 capex too doubled in a year, up from Rs 6,270 crore recorded in FY20. This means FY22 capex growth came on the back of a strong base. The entire capex was met through internal accruals.

'Capex incurred on land, machinery, creation of rail infra'

"CIL's capex boost was to catalyse the output growth and align it with evacuation outlets. Most of the capex was spread on land, procurement of heavy earth-moving machinery setting up CHP/silos and creation of rail infrastructure for coal transportation," said a senior official of Coal India Limited.

Land and HEMM combined accounted for 40 percent of the total capex at Rs 5,967 crore.

Capex under land was Rs 3,262 crore during 2021-22, posting a jump of 17 percent over the previous fiscal's Rs 2,786 crore. Acquisition of land is vital for CIL to enhance its production from OC mines. Land procured for two projects of MCL, Searmal and Talacher, would help the company further widen its mining operations.

The centralised procurement of HEMM for ECL, NCL, SECL amounted to the bulk of Rs 2,605 crore under this head. Replacing the old fleet with the modernised equipment to be deployed in OC mines, especially in SECL and NCL, is essential for output ramp-up.

The other important head of capex spend, at Rs 2,322 crore, was for setting up coal handling plants/silos, with a major share taken up by NCL, SECL and MCL. Strengthening of evacuation infrastructure through rail sidings and corridors accounted for Rs 2,307 crore of the total capex, said CIL.

Apart from environmental benefits, CHP/silo combination ensures faster seamless coal evacuation and quality coal loading. Rail sidings and lines are being dovetailed with CHPs and silos.

The capex growth during all the four quarters of FY22 and even on monthly basis was significantly higher compared to the previous year.

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