Coal India capex doubles at Rs 13,115 crore in FY21

Coal Insights Bureau

Coal India Ltd (CIL) more than doubled its capital expenditure to a record high of `13,115 crore in FY21, compared to the previous year.

Against the capex of Rs 6,270 crore in FY20, the company clocked a 109 percent growth amid the Covid slump, according to a senior official of the company.

This also marks the state-owned Maharatna coal miner’s all-time high capital expenditure, breaching the ramped up capex target of Rs 13,000 crore, achieving 101 percent of the revised target.

CIL’s original sanctioned capex budget was Rs 10,000 crore for FY21.

However, the government assigned CIL a challenging task of achieving 130 percent of the budgeted target to be evaluated as ‘Excellent’ under this specific parameter in MoU rating.

This prompted CIL, for the first ever time, to tweak up its capex budget by 30 percent and revise it to Rs 13,000 crore.

“The entire capital expenditure was funded through internal resources. Capex growth during all the four quarters of FY21 was significantly higher compared to previous year. Progressive up to December 2020 also our capex utilisation was more than what was mandated by Ministry of Coal,” said the official.

Procurement of heavy earth moving machinery at `3,453 crore topped the list of capex heads for FY21, followed by land at `2,470 crore.

Capex in joint ventures, in proportion to CIL’s shareholding, such as Talcher Fertilizers Ltd and Hindustan Urvarak & Rasayan Ltd, accounted for `2,194 crore. CIL’s coal evacuation initiatives which include setting up of coal handling plants, silos and constructing sidings, accounted for `1,398 crore.

Construction of rail corridors and railway lines summed up `1,166 crore, while the rest was made up by different other heads.

CIL and five of its subsidiaries CCL, NCL, WCL, MCL and CMPDIL coasted through their respective revised capex targets for 2020-21.

SECL, though it did not surpass its revised budgeted target, was the highest capex spender among all CIL’s subsidiaries at Rs 3,260 crore creating a record for itself.

“The high capex will yield positive results to the company in ensuing years in terms of production and coal transportation” said the official.

Coal production down 1%

Coal India’s production declined 1 percent on year to 596.2 million tons (mt) in FY21, due to lower demand from power sector resulting in drop in output second year in a row.

On the other hand, offtake suffered a decline of 1.3 percent to 573.8 mt compared to 581.4 mt in FY20.

“Despite our best efforts there was a marginal contraction in output and off-take by 1 percent and 1.3 percent respectively on a year-on-year comparison due to Covidled lack of demand,” the company said in a release.

Lower offtake led to pithead stockpile touching 99 mt. On a brighter note, Coal India’s sustained efforts helped it to curb imports to the extent of 90 mt in FY21.

It booked an all-time high of 124 mt in its e-auctions while overburden removal went up by 17 percent growth during the year which will lead to faster production pickup when demand improves.