Wednesday, 26 January, 2022
HomeEconomyIndia's aluminum producers face 'precarious situation' as coal stockpiles plunge

India’s aluminum producers face ‘precarious situation’ as coal stockpiles plunge

Federation of Indian Mineral Industries says most aluminum factories have stockpiles for only one to two days, ask govt to restore supplies.

Text Size:

An acute coal crunch in India has created a “precarious situation” for aluminum producers as stockpiles of the fuel plummet to critical levels, according to the country’s top industry group.

Most aluminum factories, which have their own power generation plants, have stockpiles for only one to two days, B.K. Bhatia, additional secretary-general at the Federation of Indian Mineral Industries said by phone. While aluminum output hasn’t been affected so far, there may be production cuts by the end of the month if coal supplies don’t recover, he said.

Tightening supplies of coal have triggered a power crisis in India as about 70% of the nation’s electricity is fired by the fuel. A power cut of more than two hours at aluminum plants can cause the molten metal in the potline to become solid, forcing the smelting unit to shut down for at least six months, according to the Aluminium Association of India.

FIMI has written to India’s coal ministry seeking restoration of coal supplies as soon as possible as aluminum and steel plants have “abysmally low critical coal stocks.” The power plants are being forced to reduce generation and face a “huge risk” of shutdowns, it said.

The low supplies have “brought down the industry to almost standstill and left with no time to devise any mitigation plan to continue sustainable operations,” it said in the letter.

India’s aluminum companies, including Vedanta Ltd., Hindalco Industries Ltd. and state-run National Aluminium Co., have a combined annual capacity of about 4 million tons of the base metal.

Imports of coal, which makes for about 35% of the cost of producing the metal, are not a viable option to meet the shortfall as international prices have gone up exponentially and ocean freight is also at an all-time high, it said.—Bloomberg

Also read: Soaring oil prices, coal shortage raise inflation alarm in India ahead of RBI meet


Subscribe to our channels on YouTube & Telegram

Why news media is in crisis & How you can fix it

India needs free, fair, non-hyphenated and questioning journalism even more as it faces multiple crises.

But the news media is in a crisis of its own. There have been brutal layoffs and pay-cuts. The best of journalism is shrinking, yielding to crude prime-time spectacle.

ThePrint has the finest young reporters, columnists and editors working for it. Sustaining journalism of this quality needs smart and thinking people like you to pay for it. Whether you live in India or overseas, you can do it here.

Support Our Journalism

Most Popular