NALCO may shut down 227 electrolytic pots due to coal shortage at its CPP; shares fall 4% on Thursday

NALCO may have to close one more unit after shutting down three units of its Captive Power Plant, each of 120 megawatt capacity due to shortage of coal supply. This is likely to impact its aluminium smelting operations seriously. Nalco is currently drawing around 190 MW of power from the state grid at a higher rate because of the shortage at CPP.

“Short supply of coal has severely impacted aluminium production of NALCO and also the cost of power, as the power purchased from the grid is costly as compared to the power produced by NALCO at its CPP,” the state-run unit said in a statement.

Nalco’s CPP at Angul and steam and power plant at Damanjodi are depended on Mahanadi Coalfields Ltd, a Coal India Ltd arm for coal supply.

Nalco has already stopped 80 electrolytic pots in the smelter because of power issues and further closure is expected. NALCO may be forced to shut down up to 227 numbers of electrolytic pots in phases in order to secure the safety of the pots. The decision will depend “upon the power generation in CPP, matching with coal receipt,” the company statement said.

Reportedly, Nalco’s Angul plant is receiving around 8 to 9 thousand tonne coal per day, accounting a shortfall of around 7 to 8 thousand tonne each day that has led to exhaustion of buffer stock.

Unions and associations have appealed to MCL, Coal India and the coal ministry for increasing coal supply to NALCO.

Nalco’s shares lost over 4 per cent in the stock market on Thursday after the news of production disruption due to coal shortage floated in the market.