AAI seeks immediate resumption of coal supplies for survival of domestic industry

In a letter to Coal India, AAI said to avoid closure of the aluminium industry and save lakhs of livelihoods and SMEs, Coal India should normalise the precarious situation with immediate resumption of coal and rakes supply for the highly power-intensive aluminium industry CPPs, and earmarking at least 25-30 coal rakes per day for economically viable and sustainable industry operations.

With the revival of the economy and post-pandemic industrial activity, the CPP-based industries are highly dependent on un-interrupted coal supply, which is vital for sustainable operations and costcompetitiveness of the power-intensive industries vis-a-vis the global players.

Any production curtailment by this sector will have cascading effect on consumption and downstream supply chain, thereby adversely impacting the nation's GDP growth, AAI said.

Aluminium industry CPPs were facing alarmingly depleted coal stocks of 3-4 days last year as compared to the prescribed level of 15 days.

With the efforts of Coal India and its subsidiaries, the situation of the power sector has now improved significantly with 9-10 days' stocks from 3-4 days in August-September, 2021.

The AAI said, however, this has come at an enormous cost to the CPPs and the worst impacted is the aluminium industry, which continues to struggle to get uninterrupted coal supplies, resulting in a backlog of over 1,200 coal rakes.

Most of the available coal and rakes are being diverted away to the power sector as "Priority Coal Supplies". The country's booming manufacturing sector also stares at a possible derailment if the present situation is not addressed immediately, and may lead to collapse of the domestic industry and associated SMEs.

Further, the shortage of raw materials and aluminium inputs to other key industries will lead to increased imports and loss of export earnings.

Aluminium is a continuous process based highly power-intensive industry, and requires uninterrupted quality power supply through in-house CPPs operating 24x7 for 365 days and continuous coal supplies are vital.

One tonne of Aluminium production requires 14,500 units of continuous power, which is 15 times in comparison to steel and 145 times as that for cement.

There is no alternative means to meet this intense power demand. Any power outage/failure (2 hours or more) results in freezing of molten aluminium in the pots and plant shut-down for at least six months, rendering heavy losses and restart expenses.

Once restarted, it will take almost a year to get the desired metal purity. The state DISCOM's network is also unable to cater to the high power requirement. For example, power requirement of aluminium smelters based in Odisha is 6,000 MW, which is almost double the average power load of the entire state of Odisha, the AAI said.