AAI draws PM’s attention to a recurring coal supply shortage for the energy-intensive aluminium sector

The Aluminium Association of India (AAI) has once again attempted to bring the Prime Minister’s attention to the shortage of coal, seeking his immediate intervention for the resumption of sufficient coal supplies to the domestic non-power sector.

In a letter to the PMO office, the association has mentioned that around 6,233 railway rakes, representing 25 million tonnes, is due as long-pending supplies to the non-power industries. AAI has also noted that challenges due to coal shortage have continued to hit the non-power sector despite improvements in Coal India’s production performance.

Previously, AAI had written a letter to the PMO when Coal India decided to restrict coal deliveries to the non-power sector in March, asking for an immediate supply of coal to the highly energy-intensive aluminium plants by assigning 25-30 rakes per day.

Between April and July in FY2023, Coal India’s production grew by 24 per cent Y-o-Y, which led to a total supply growth of 10 per cent from its reserves and 21 per cent rise to the power sector, in particular. But supply to the non-power sector plummeted by 28 per cent, noted AAI in a letter to the PMO.

According to AAI, its members have been struggling to secure sufficient supplies of coal for operations since the last August. Though several agreements were signed for 100 per cent of the requirements of the non-power sector, the actual materialisation dropped to 55 per cent, much below the trigger level of 75 per cent, while railway supplies became almost non-existent.

“The aluminium sector is a continuous-process industry requiring a steady supply of power. Any prolonged power interruption in an aluminium smelting operation for more than 2 hours can lead to the freezing of molten aluminium within the smelting pots, which takes almost a year to rectify and optimise, causing enormous production, cost and supply disruptions,” AAI said in the letter.

“This has led the aluminium industry to collectively set up captive power plants of over 9,400 MW with an investment of over ₹50,000 crore. These captive power plants are larger in size, more efficient, located closer to coal pit heads, and could therefore better utilise the coal supplies from CIL,” the association added.