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Facing a coal crunch, primary Aluminium manufacturers in India have urged Coal India to ensure adequate coal supplies to industries for maintaining sustainable operations. 


The Aluminium Association of India has voiced its concern against the drastic curtailment of coal supplies by Coal India without giving them time to devise any mitigation plan to continue sustainable operations.


CIL significantly reduced coal supplies, railway rakes for captive power plants (CPP), mentioned AAI in a letter to the miner. The letter said that aluminium smelting requires an uninterrupted and high-quality coal supply. The aluminium industry’s CPPs have Fuel Supply Agreements (FSAs) with CIL and its subsidiaries for assured long-term coal supply. The abrupt stoppage of this secured coal supply impacts small industries in downstream sectors due to the increased prices of finished products. 


According to the association, coal accounts for 40pc production costs for primary aluminium manufacturers. Primary Aluminium Manufacturers have made huge investments of Rs 1.2 lakh crore ($20 billion) to double domestic annual production capacity to 4.1mn mt to cater to the ever-increasing demand for aluminium in India. The Indian Aluminium industry has also set up 9000MW CPP capacity to fulfil their power requirement for the smelter and refinery operations and to reduce dependence on power grids. 


Incidences of power failure result in the freezing of molten aluminium in the pots for more than two hours and could lead to shutting down of the aluminium plant for at least six months rendering heavy losses and restart expenses. Once restarted, it requires at least a year to achieve desired metal purity.


Increased power cost is costing heavily and the incidences of high Central and State tax duties cost 15pc of aluminium production cost which is amongst the highest in the world.


The Association added that stopping or curtailing secured coal supplies should not be taken on an ad-hoc basis and industries should be given a notice of 2-3 months in advance for implementing mitigation measures. 

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