“The current predicament is a massive blow to the Non-power sector of the country which has been gradually turning around after suffering for more than a year due to the pandemic outbreak in 2020,” CCAI wrote in a letter dated 23rd of October.
Due to low stock positions at several power plants, state-owned Coal India Ltd (CIL) has asked its subsidiaries to refrain from conducting any e-auction of coal, except special forward e-auction for the power sector, till the situation stabilizes.
Coal India in a letter filed with the BSE on 22
nd of October said that due to low stock position in power houses and a spurt in economic activity the coal supply is temporarily prioritized to the power sector.
The Non-power Sector consumers including Captive Power Plants (CPP), Aluminum, Steel, Cement, Sponge Iron, Chemical, Paper etc have long been facing an acute shortage of coal as supply via Rail mode was halted from most of the CIL Subsidiaries since the beginning of October.
“This situation has further worsened as supply to the Non-Regulated Sector (NRS) consumers has been completely halted via Road mode as well,” the letter said.
Lack of fuel at the plant-end is forcing many non-regulated sector (NRS) consumers to stall their operations while several others are on the verge of closure, the letter said.
Some of India’s top metals and cement makers are facing severe coal shortages as Coal India’s Southern Eastern Coalfield (SEC) has said that they will be suspending all the coal supplies and rakes to a non-power sector.
Coal India usually loads around 210-230 rakes per day for both power and non-power categories. Around 50-60 rakes per day go for non-power categories and half of it to sectors like steel and aluminium.
Aluminium Association of India has also written to the chairman of Coal India Ltd seeking an immediate supply of rakes to the industry.
“In Aluminium industry coal accounts for ~40% of the production cost….
The recent decisions for stoppage of secured coal supplies and rakes for the Non-Power Sector are detrimental for the Aluminum industry,” the letter dated 13th of October said.
AAI said that this will jeopardize the sustainability of these companies as the continuous process based plants are not designed for Adhoc shutdown and start of operations.
Coal India has been saying that it is working towards augmenting its production to ease the situation.