According to the country’s top industry group, an acute coal shortage in India has created a “precarious situation” for aluminum producers, as fuel stocks have plummeted to critical levels.
Federation of Indian Mineral Industries Additional General Secretary BK Bhatia said over phone that most of the aluminum factories, which have their own power generation plants, have reserves for only one to two days. 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.
Shortage in supply of coal has created a power crisis in India as almost 70% of the country’s electricity is fueled. 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 reserves.” Power plants are being forced to reduce production and face a “huge risk” of shutdown. said.
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.
This story has been published without modification in text from a wire agency feed. Only the title has been changed.
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