In a letter to CIL CMD, the association said: “This refers to the upcoming crisis situation for the entire aluminum sector due to the ad hoc decision to stop / significantly reduce the Coal supplies and rakes for the non-energy sector (NRS) mainly captive power plants (CPPs) causing a coal crisis for the aluminum sector.
According to AAI, a one-off decision without notice crippled the industry and the industry did not have time to design a mitigation plan to continue sustainable operations. “Moreover, resorting to imports in such a short timeframe is not feasible and also not in the spirit of the government’s vision of making India a self-sufficient India,” he added.
The association pointed out that huge investments of Rs 1.2 lakh crore have been made in this sector to double the national production capacity to 4.1 mtpa to meet the growing demand for aluminum in the country. The industry employs a million people and has developed 4000 SMEs in the downstream sector.
According to AAI, aluminum is an energy-intensive industry based on a continuous process in which coal accounts for 40% of the cost of producing aluminum. The aluminum foundry requires a quality uninterrupted power supply for production, which can only be satisfied by internal PPCs.
India’s aluminum industry has built up a 9,000 MW CPP capacity to meet the electricity needs of smelter and refinery operations and reduce grid dependency. Any power failure / failure (2 hours or more) will cause the molten aluminum in the pots to freeze, which will cause the plant to shut down for at least 6 months, resulting in heavy losses and restart costs, and once restarted, it will take almost a year to achieve desired metal purity.
AAI demanded the immediate resumption of coal supply against secure links for sustainable industrial operations and the allocation of coal shipments via rakes in a proportion of 75% (electricity) and 25% (non-electricity), in accordance with the MoC circular for auction links.