Coal shortage: Aluminum producers ask PMO to direct Coal India to prioritise supply

The Aluminium Association of India (AAI) has asked the PMO to address the coal shortage faced by the industry and direct Coal India to prioritise coal supply to the sector

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Aluminium industry has reached out to the PMO and has sought an intervention in the regularisation of coal supplies

New Delhi: The Aluminium Association of India (AAI) has sought the intervention of the Prime Minister’s Office (PMO) to address the coal shortage faced by the industry and said Coal India should be instructed to prioritise the supply of dry fuel to the sector. “In view of the extreme difficulties being faced, which will force the Indian aluminium industry to standstill, we seek your urgent and immediate intervention to direct Coal India to honour its agreement and supply coal to aluminium industry on priority basis,” stated AAI in a letter sent to the principal secretary in PMO (Prime Minister’s Office) PK Mishra earlier this month.

Despite record coal production and dispatches, coal under Fuel Supply Agreements (FSAs) are being denied to CPPs (Captive Power Plants) of aluminium producers, the body pointed out.

Coal shortage putting investment at risk

Indian aluminium industry has invested Rs 1.4 lakh crore for setting up 4.1 MTPA capacity.

The industry provides direct/indirect employment to more than 10 lakh people and business opportunities to over 4,000 SMEs (Small and Medium Enterprises) in the hinterlands of the country.

Aluminium production is highly power-intensive without having a provision to switch off and switch on the production. Any power outage of two hours freezes the pots and puts the entire investment at risk, it explained.

“To meet stringent and continuous power demand, aluminium industry has set up their in-house captive power plants of 9,400 MW with an investment of Rs 50,000 crore,” it stated.

The power sector situation has improved significantly with 13-plus days’ stocks of coal from as low as three to four days in August-September 2021, it said.

However, it pointed out that this has come at an enormous cost to the non-power sector and the worst impacted are the CPPs of the aluminium industry, which continues to struggle for getting un-interrupted coal supplies resulting a backlog of over 6,200-plus rakes for the entire non-power sector (25 million tonnes of coal).

Most of the available coal and rakes are being diverted to the power sector as “priority coal supplies”, while the CPPs are starving and facing acute coal crunch, it pleaded.

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