The Orissa High Court on Monday asked the Union government to set up a committee with experts from the ministries of coal, power, mines and the railways to look into the shortage of coal supplies. It also asked the government how the coal requirements of Vedanta, Hindalco and others can be met.

The companies alleged before a Division Bench led by Chief Justice S. Muralidhar that they are on verge of closure if their regular coal requirements are not immediately restored. The judges then asked the government to respond to the petitions filed by Vedanta, Hindalco and others on May 5 — the next date of hearing when the government is likely to give a date to hear the representations of these companies.

Vedanta has sought a direction from the government to forthwith provide 62,000 million tonne (MT)/day and 2700 MT/day for its aluminium smelting plant at Jharsuguda and alumina refinery at Lanjigarh, respectively, under the operational fuel supply agreements (FSAs) and other linkage/auction agreements. It had requested an immediate supply of 11-13 rakes of coal per day from Mahanadi Coalfields (MCL) and the Railways for the survival of its plants.

Against the total requirement of 62,148 tonnes per day, Vedanta is getting a paltry allocation of 16,706 tonne per day, which is 1/4th of the required quantity to sustain the smelter operations, senior counsel Dhruv Mehta and counsel Anubhav Ray, argued.

The counsel told the high court that under the present dispensation, Vedanta ought to be supplied with 12.6 rakes per day, but it is only given 2 rakes per day. Owing to the commercial exigencies and also the short supply by MCL, for the sustenance of its two captive power plants, Vedanta is compelled to participate in temporary spot auctions, since the past few months it has been purchasing coal at a premium amount, they added.

For April, out of the FSA supply of 5.6 rakes per day, the company got only 0.2 rakes per day which translated to less than 1,000 tonne instead of the 21,000-tonne daily requirement. As far as pending rakes from the auction are concerned, against 7.1 rakes it is only getting 1.6 rakes per day, i.e; against 28,000 tonne per day, it is getting 7,143 tonnes per day, counsel said.

Vedanta told the HC that for the past four months it had increased coal imports, but its plants cannot sustain the imported coal as they are specifically designed to consume indigenous coal. Seeking parity with Nalco — which was allocated four rakes per day for its Angul plant, on the directions of the HC on April 25 — the petition stated that CPPs of both Vedanta and the PSU cater to the power requirements of their respective refinery.

“Due to shortfall in coal supplies by MCL for a prolonged time, the flagship smelter plant has come very close to complete shutdown. As aluminium production is a continuous process-based industry and any power outage of more than two hours freezes the pots and restart require 12 months of capital investment, 12 months of settlement to come to stable operations, it would be a catastrophic event for Vedanta…” the petition stated.

As of now, Vedanta-Jharsuguda has less than three days of domestic coal stock and is at present importing power to the tune of 1,000 MW (equivalent to 20,000 MT/day of coal) which is the maximum technical limit of continuous drawal allowed from the Grid due to transmission line constraints, the petition stated.