Coal India expects its capital spend in 2023-24 to surpass the target of Rs 16,500 crore as mining activity gains momentum post-monsoon.
The government-owned miner’s capex spend was Rs 10,942 crore at the end of November 2023, 7.6 per cent higher than Rs 9,751 crore in the corresponding period of the previous year.
“We are striving to achieve around 80 per cent of the current financial year’s target capex by the third quarter ending December,” said a senior executive of the company.
With a focus on strengthening coal evacuation infrastructure in its mining areas, there were three major areas where on an aggregate 31 per cent of the capex (Rs 3,247 crore) was spent between April and November 2023.
These include setting up railway sidings and corridors (Rs 1,842 crore), construction of coal handling plants and silos for mechanised transportation of coal (Rs 1,292 crore) and establishing roads (Rs 113 crore).
“Having a robust coal evacuation infrastructure to transport increased volumes of coal in future is a priority where we are upping investments. Capital expenditure is important for asset creation and future revenue,” the executive said.
The other major heads of spend include land acquisition and rehabilitation (Rs 2,486 crore), procurement of heavy earth moving machinery (Rs 1,954 crore) and spending towards diversification and joint ventures such as solar, Hindustan Urvarak Rasayan Limited and Talcher Fertilizers Limited (Rs 1,040 crore).
Coal India’s capital expenditure used to hover between Rs 6,000 crore and Rs 7,000 crore in the past. However, it has taken off sharply in 2021-22 to Rs 13,284 crore and has since remained steady.
During three successive fiscals till FY23, the miner’s capex spend has exceeded the budgeted targets.
Coal India has produced 460 million tonnes of coal till November 2023, with an 11 per cent year-on-year growth. The company is hopeful of breaching a demand projection of 610mt by the power ministry for the current fiscal.