India aluminium producers hit by rising coal, transportation costs

Primary producers of Aluminium in India are hit by increasing operating costs which affects their margins. The operating costs have gone up due to increase in price of raw materials, transportation costs, increase in price of Coal and higher employee remuneration, according to Dinsha Patel, India Minister of State for Mines.

The Minister informed Rajya Sabha, the upper house of Parliament that the the primary producers endeavour to reduce their operating cost through a slew of measures like reducing power consumption by adopting energy conservation methods, modernization of equipments, increase in current efficiency, reducing fallen anodes in smelter, improving productivity of workers, etc.

As energy cost is substantial in aluminium smelting, all the primary producers of aluminium have been brought under the ambit of a new initiative launched by the Government of India for energy conservation and assigned a target to reduce specific energy consumption from its base line value within a defined period i.e 2010-11 to 2013-14, to be monitored by the Bureau of Energy Efficiency(Ministry of Power). Besides, the Government also reviews from time to time the rates of various duties including import duty on raw materials required for production of aluminium, reduction in transmission loss, allocation of Coal blocks and/or linkage coal to the extent possible, with the objective of reducing the overall operating cost of primary Aluminium producers.

The aluminium producers have witnessed increase in prices of major raw materials and energy inputs such as Calcined Petroleum Coke, Coal Tar Pitch, Aluminium Flouride, Caustic soda, Fuel oil, etc.