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Aluminium industry facing coal crunch, says AAI

The association said the aluminium industry is highly power-intensive and the current crisis is because Coal India has significantly reduced supplies.

Aluminium industry facing coal crunch, says AAI

(Representational Image; Source: iStock)

The aluminium industry is faced with an acute coal crisis as supplies have been reduced and railway rakes for captive power plants are also in shortage.

Flagging the issue, the Aluminium Association of India has asked Coal India to resume adequate coal supply against secured linkages, allocation of railway rakes on a priority basis to the aluminium industry and to provide prior notice to CPP based industry before resorting to any curtailment of coal supplies.

The association said the aluminium industry is highly power-intensive and the current crisis is because Coal India has significantly reduced supplies.

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Aluminium smelting requires an uninterrupted and high-quality power supply for production which can be met only through in-house CPPs.

Hence, curtailment of coal supplies, without any advance notice, will bring the industry to a standstill as it has been left with no time to devise any mitigation plan to continue sustainable operations.

The Aluminium industry CPPs has signed FSA (Fuel Supply Agreement) with CIL and its subsidiaries for assured long term coal supply, it noted.

Aluminium is a continuous process based highly power-intensive industry wherein coal accounts for 40 per cent of Aluminium production cost.

Huge investments of Rs 1.2 lakh Crore ($20 billion) have been made to double the domestic production capacity to 4.1 mtpa to cater to the country’s increasing demand.

The Indian Aluminium industry has set up 9000 MW CPP capacity to meet its power requirement, said the release of the association.

Any power outage/or failure (2 hours or more) results in freezing of molten Aluminium in the pots which leads to shutting down of the aluminium plant for at least 6 months rendering heavy losses and restart expenses, and once restarted it takes almost a year to get the desired metal purity.

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