The power intensive aluminium industry, hurt by the government’s decision to allocate more coal-bearing railway rakes to the electricity generation sector, has demanded resumption in regular fuel supply as per their contracted quantity.
The Aluminium Association of India (AAI) has written to the Prime Minister’s Office (PMO) intimating about the critical coal shortage situation after supplies were reduced without notifying the industry in advance.
AAI pointed coal rakes allocated to this segment has not been more than 15% since July, 2017. It was less than 9% in June, 2018. Out of the 63 MT requirement, the aluminium sector had received 40 MT in FY18. Captive power consumers, who mainly run their generation units to cater to own industrial production demand, have fuel supply agreements contracted with Coal India. The coal ministry had clarified in 2016 that non-power users should be allocated 25% of the fuel.
Power constitutes about 40% of the production cost of aluminium, where one tonne of the refined metal requires about 14,500 units of electricity generated from burning 11.7 tonne of coal. The aluminium industry has set up about 9,500 MW of captive power capacity.