Aluminium industry seeks immediate coal supplies to power up plants

The aluminium industry has sought immediate resumption of coal supplies to sustain the industry’s operations that has been crippled by inadequate power availability.

In a letter to the coal ministry, aluminium producers with captive power units have pointed out how “ad hoc decisions of stopping coal supplies and rakes” has caused a crisis in the entire sector.

Industry body Aluminium Association of India (AAI) has written to the Centre pointing out that coal supplies for captive power plants (CPPs) from Coal India subsidiaries such as Mahanadi Coalfields Ltd (MCL) and South Eastern Coalfields Ltd (SECL) are being diverted to the power sector resulting in a coal supply crunch.

“The CPPs have signed FSA (fuel supply agreements) with CIL, which is a binding agreement with long term coal supply assurance,” the AAI letter on October 4 to the Coal Secretary said.

“Any abrupt stoppage of this secured coal supply affects the operations of the industry severely resulting into a grinding halt, thereby impacting the SMEs in downstream sector,” it said.

This leads to higher prices of finished products, burdening consumers, the letter said.

It said that the new ad hoc decision without any advance notice has brought down the industry to a standstill and the “industry has been left out with no time to devise any mitigation plan to continue sustainable operations.”

The industry body said that aluminium smelters in Odisha require more than 6000MW of power, which is almost double the average power load of the state.

Aluminium smelting requires uninterrupted quality power supply, which can be met only through in-house CPPs, operating 24 hours on all days of the year, it said.

The industry body, which demanded rakes allocation on priority for aluminium industry, pointed out that decision for stopping secured coal supplies should not be taken on an ad hoc basis. “The industry should be given prior notice of one to three months to devise a mitigation plan with respect to coal and power imports,” it said.