CIL spends Rs 10,717 cr in Apr-Dec period, records 37% jump in capex y-o-y

• CIL's capex spend during the referred period marks 86.3 percent of the progressive target achievement
• The three major heads that accounted for 54% of the total capex during April-December 2021 at Rs 5,786 crore were: land acquisition, procurement of HEMMs and JVs

New Delhi: Continuing to maintain the growth trend in its capital expenditure, Coal India Limited (CIL) has incurred a capex of Rs 10,717 crore till December of the ongoing financial year, clocking a strong 37.4 percent year-on-year growth, said CIL in an official statement on Wednesday. The coal miner's capex during April-December period of FY20 was Rs 7,801 crore. The capex scale up comes at a time when the Centre has been exhorting public sector entities to step up their annual capex. CIL's capex spend during the referred period marks 86.3 percent of the progressive target achievement. 

Capex is a key performance area which has a weightage value of 15 percent in performance evaluation under Memorandum of Understanding (MoU). CIL signs MoU with the Ministry of Coal at the beginning of every financial year, delineating the performance targets for the year.

54% of capex spent on land acquisition, HEMMs & JVs

The three major heads that accounted for 54 percent of the total capex during April-December 2021 at Rs 5,786 crore were: land acquisition, procurement of heavy earth moving machinery (HEMM) and joint ventures, primarily Hindustan Urvarak Rasayan Limited (HURL) and Talcher Fertilizers Limited (TFL).

The construction of coal handling plants, silos, which cost Rs 1,344 crore, and rail sidings and rail corridors, which cost Rs 1,785 crore, made up 29 percent of CIL's entire capex during the first nine months of the fiscal. CIL is focusing on increasing its evacuation capacity through rail mode by an additional 330 Million Tonnes Per Annum (MTPA) by FY24 through strengthening of its rail infrastructure. 

Capex on land acquisition, HEMMs higher than target

At Rs 2,490 crore, capital expenditure on land acquisition, crucial for developing new mines and expanding existing mines, achieved 121 percent of the progressive target by the end of December 2021. The target for the period for land acquisition was fixed at Rs 2,057 crore. The figure marks a whopping 54 percent growth under this head in comparison to the corresponding period of the previous year.

The procurement of HEMMs at Rs 2,031 crore exceeded the progressive target of Rs 1,783 crore by 14 percent during this period. CIL in a bid to replace its aging machinery with technologically advanced high capacity HEMM fleet of different types and sizes has been fast tracking the process in recent times. Primarily deployed in opencast mines, the major source of the company's coal production, these machines would help in removal of overburden and ramp up the coal output.                       

"Our endeavour is to keep abreast of our capex targets. However, capex will be contingent on the demand for coal, sales realisation, and production needs. The investments will be made accordingly," said a senior executive of the company. 

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