Nalco says facing a ‘coal crisis’ due to govt’s supply prioritization

Government of India’s NALCO, or National Aluminium Company, said its primary Aluminium smelter plant at Angul in Orissa is facing a ‘crisis’ due to the the shortage of coal to produce power.

Smelting of alumina into aluminium is one of the most power-hungry processes in industrial production. To supply power to the unit, NALCO had set up a 1,200 MW coal-fired power plant next to the smelter in Angul.

However, said the aluminium manufacturer, it is increasingly finding it difficult to find coal to run the power plant. It blamed it on two reasons — a recent change in government policy and a gradual decline in production of coal from its main source of coal, MCL (Mahanadi Coal Ltd) operations in nearby Talcher.

The government had, in May, instructed coal producers to give first priority to companies that make power to sell to others, and to supply the remaining coal to companies who make power for captive use — like NALCO.

Many industrial bodies had protested the decision at the time, and warned that it would create huge problems for industries who depend on captive power plants to run their operations.

NALCO blamed the “priority given to IPP (independent power producers) over CPP (captive power producers) and the reduction in production from MCL, Talcher” for the situation.

India’s largest aluminium producer, however, said it is buying about 120 MW — about 10% of the power plant’s full capacity — from third party suppliers to cope with the shortage.

“To tide over the shortage, NALCO is temporarily importing 120 MW power from State Grid without curtailing any production as on date. As such, there is no production loss for coal shortage,” it said.