New Delhi: Aluminum manufacturers on Wednesday sent an SOS to the PMO (Prime Minister’s Office) for resumption of coal supply, saying the shortfall has pushed the industry to the brink, which is home to some 5,000 MSMEs (medium) in the downstream. and small enterprises). At a time they are coming out of the pain of the pandemic and affecting more than one million jobs.
Coal stocks at aluminum plants became critical after the government halved supplies from Coal India in August and was restricted to just 10% as rakes were diverted to shore up inventory at power plants. Despite aluminum production being declared a public utility service, coal supplies were cut as it is of strategic importance and an essential commodity for diverse sectors that are critical to the economy.
The shortfall is now risking an investment of Rs 1.4 trillion, or $20 billion, with the industry doubling domestic capacity to 4 million tonnes per annum – or the second largest capacity in the world.
In view of the dire situation, aluminum association of india, representing the entire gamut of producers, explained in his presentation to the PMO that coal was important as there was no substitute for captive power as aluminum production is a continuous process involving 15 times more than steel and 145 times that of cement. More energy is required.
“Any power failure of more than two hours will result in plant shutdown for at least six months and will result in heavy losses, re-start expenses and prolonged metal impurity. The industry invested Rs 50,000 crore to set up a 9.4 GW CPP which accounts for 6% of the country’s total demand and 123% of the total energy traded on the Indian Energy Exchange (7.6 GW in 2021). Hence, it is technically not possible to get such huge power from the national grid or any other alternative source,” the association said.
According to the association, 14,500 units of continuous electricity are required to produce one tonne of aluminum as against 1,000 units for making one ton of steel and about 100 units for cement.
Ironically, despite cuts in the aluminum industry, about 10% of the country’s 209 gigawatt (GW) coal-based production capacity is still vulnerable to outages amid rising demand for coal, Crisil Ratings said on Wednesday. Despite a 10% drop in power demand due to recent rains, coal shortage has remained with the stock for almost five days. Since these plants do not have a supply linkage and coal prices remain high in the open or import market, these plants may consider withdrawing as revenue over operating costs, the agency said.
Coal stocks at aluminum plants became critical after the government halved supplies from Coal India in August and was restricted to just 10% as rakes were diverted to shore up inventory at power plants. Despite aluminum production being declared a public utility service, coal supplies were cut as it is of strategic importance and an essential commodity for diverse sectors that are critical to the economy.
The shortfall is now risking an investment of Rs 1.4 trillion, or $20 billion, with the industry doubling domestic capacity to 4 million tonnes per annum – or the second largest capacity in the world.
In view of the dire situation, aluminum association of india, representing the entire gamut of producers, explained in his presentation to the PMO that coal was important as there was no substitute for captive power as aluminum production is a continuous process involving 15 times more than steel and 145 times that of cement. More energy is required.
“Any power failure of more than two hours will result in plant shutdown for at least six months and will result in heavy losses, re-start expenses and prolonged metal impurity. The industry invested Rs 50,000 crore to set up a 9.4 GW CPP which accounts for 6% of the country’s total demand and 123% of the total energy traded on the Indian Energy Exchange (7.6 GW in 2021). Hence, it is technically not possible to get such huge power from the national grid or any other alternative source,” the association said.
According to the association, 14,500 units of continuous electricity are required to produce one tonne of aluminum as against 1,000 units for making one ton of steel and about 100 units for cement.
Ironically, despite cuts in the aluminum industry, about 10% of the country’s 209 gigawatt (GW) coal-based production capacity is still vulnerable to outages amid rising demand for coal, Crisil Ratings said on Wednesday. Despite a 10% drop in power demand due to recent rains, coal shortage has remained with the stock for almost five days. Since these plants do not have a supply linkage and coal prices remain high in the open or import market, these plants may consider withdrawing as revenue over operating costs, the agency said.
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