Aluminium industry turns to PMO to help fix coal shortage

Aluminium industry turns to PMO to help fix coal shortage

aluminium industry

Seeking PMO‘s intervention for adequate coal supply to the aluminium industry, key players have said the shortages have put 7.5 lakh jobs in the sector at risk and investments are bogged down by a heavy debt load of Rs 70,000 crore.

Drawing the attention of the Prime Minister’s Office (PMO) and others to the issue, the Aluminium Association of India (AAI) has sought immediate resolution for “sustainability of Indian aluminium industry.”

“The investment of Rs 1.2 lakh crore in the aluminium sector is holding a debt of Rs 70,000 crore and the employment for 7.5 lakh people is at a very critical risk in the coal shortage scenario,” AAI has said in a letter to the PMO and the coal ministry.

Stressing that “coal security is the most critical aspect of sustainable operations and ramp-up of aluminium smelter”, it has sought directions to Coal India to make available committed quantity of coal to them.

The association has said the coal shortfall against linkages is 57 per cent in the case of Vedanta  21 per cent for Balco and 78 per cent for Hindalco.

It contended that aluminium is a highly power-intensive industry in which power contributes to 45 per cent of production cost.

“Any power outage/failure (4 hours or more) results in freezing of aluminium pots and shutting down of plant for at least 6 months rendering heavy losses,” it said.

The letter further said the industry has set up 8,700 mw captive power plant capacity to meet power requirement for operations, but recent coal materialisation has been substantially low and the committed coal supply quantity under the linkages auction is not being fulfilled.

The industry submitted that it has made huge investments to the tune of Rs 1.2 lakh crore in the last few years to raise domestic production capacity to 4.1 mt (million tonnes) from 2 mt, in line with increasing demand.

Also, it said its contribution towards government forex earnings in the form of exports accounted for USD 3.2 billion in 2016-17, 1.2 per cent of the total shipments.

Info Source- economictimes