Aluminium Association of India Lobbies Government For Relief From Coal Rationing

Aluminium Association of India Lobbies Government For Relief From Coal Rationing

Calls for relief from India’s aluminium producers from coal supply quotas intensified over the weekend, as the country’s main aluminium trade group vocalized concerns regarding the government’s choice in supplying free-standing power plants instead of power facilities dedicated to powering the country’s aluminium smelters.

The Aluminium Association of India published a letter to the Indian government earlier this week challenging its decision to direct Coal India to supply coal from subsidiaries Mahanadi Coalfields Ltd (MCL) and South Eastern Coalfields Ltd (SECL) to power sector plants and not to captive plants that power aluminium operations.

The Association points out that this instance is but the most recent in a long string of similar moves beginning this time last year.

“Coal supply and rakes from MCL and SECL are again being diverted to the power sector, resulting in coal crunch for the aluminium sector, which is already struggling with coal and rake availability. The adhoc decision without any advance notice has brought the industry to a standstill and without the time to devise any mitigation plan to continue sustainable operation.”

Per data from Coal India, shipments to the power sector rose by 22.2 million metric tons to 197 million metric tons since April, a rise of 12.7 percent above the same period last year. However, shipments to non-power customers dropped appreciably over the same time period.

Coal India defended its decision by saying that it was acting under the direction of New Delhi, which in turn made its decision after consulting with the coal, power, and railway ministries.

The Aluminium Association of India’s letter comes shortly after a similar statement was released by the Federation of Indian Mineral Industries (FIMI) noting the tremendous difficulties faced by aluminium smelters in locating sufficient quantities of coal and the railcars to transport it to their operations. FIMI said it has been lobbying to make aluminium smelting a core industry since last fall, but to no avail.