Panic In Non-Power Sectors Due To Coal Shortage

Non power industries like aluminum, steel, cement and paper are in a panic mode due to a coal shortage and have claimed that they are left with an average of 4-5 days of stock and that coal dispatches by rails have been stopped, according to a report by The Economic Times.

Several companies and associations have written to Coal Minister Pralhad Joshi and Coal Secretary Anil Jain. Uttar Pradesh minister Kapil Dev Aggarwal has also written to the Union Coal Minister on behalf of the paper manufacturing units in Muzaffarnagar which have a fuel agreement with CIL’s Northern Coalfield (NCL), alleging that there is a complete diversion of coal rakes to power sector.

The panic has set in due to the fact that captive power plants attached to aluminum smelters need to operate continuously. If there is a power cut for more than two hours, the molten metal starts freezing and it takes up to four months to restore normalcy.

A Coal Ministry official while talking to ET said that there are no supply regulations and the non-power sectors have enough coal but at the same time admitted that it is less than the previous levels of stock holding. He further added that all these units have stocks for six days or more but want stocks of 10-12 days.

According to the report, industry sources allege that CIL subsidiaries like NCL have not held adequate spot coal auctions for non-power consumers in the last two months at a time when imported coal prices are at an all-time high.

CIL while responding to ET’s query said that it is not regulating coal supplies to co continuous processing units like cement, aluminum and does not intend to do so. It also said that there is no such regulation in spot auctions as well.