Form of words:
aAccording to the country’s top industry group, the acute shortage of coal in India has created a “precarious situation” for aluminum producers, as fuel stocks have fallen to critical levels.
Most of the aluminum factories, which have their own power generation plants, have stock for only one to two days, said BK Bhatia, additional general secretary Indian Mineral Industry Association Said by phone. He said aluminum production has not been affected so far, but if coal supplies do not improve, there may be a production cut by the end of the month.
The tightening in the supply of coal has triggered a power crisis In India, about 70% of the country’s electricity runs on fuel. Power cuts of more than two hours at aluminum plants can cause the molten metal to solidify in the potline, causing the smelting unit to shut down for at least six months, according to the Aluminum Association of India.
FIMI has written to India’s Ministry of Coal seeking to restore coal supplies at the earliest, as aluminum and steel plants have “extremely low critical coal stocks”. It said power plants were being forced to reduce production and face a “huge risk” of shutdown.
The short supply has “nearly brought the industry to a standstill and there is no time left to formulate any mitigation plans to continue with sustainable operations,” the letter said.
India’s aluminum companies, including Vedanta Ltd., Hindalco Industries Ltd. and the state-run National Aluminum Company, have a combined annual capacity of about 4 million tonnes of the base metal.
Import of coal, which accounts for about 35% of the cost of production of the metal, is not a viable option to meet the shortfall as international prices have risen sharply and sea freight is also at an all-time high.—bloomberg
Read also: Rising oil prices, coal shortage raise inflation risk in India ahead of RBI meeting
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