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Coal India Ltd, the world's biggest miner, has temporarily stopped supplies to non-power users, reported Reuters quoting a company official, as India battles one of its worst power supply deficits in years.

"It is a temporary prioritisation of supplies to power plants till stabilisation in stocks is restored," the source, familiar with Coal India's plan said, as per Reuters.

The company said in a statement that it had stopped all online auctions of coal except those meant for the power sector.

"This is only a temporary prioritisation, in the interest of the Nation, to tide over the low coal stock situation at the stressed power plants and scale up supplies to them," it said.

The Aluminium Association of India sought the immediate resumption of full supplies. It said Coal India's move was 'detrimental' to the industry which needs an uninterrupted supply of power.

India is competing against buyers such as China, the world's largest coal consumer, which is under pressure to ramp up imports amid a severe power crunch.

Coal India said Indian customers have turned to using local coal due to higher global prices of the fuel.

India has asked power producers to import up to 10% of their coal needs amid fuel shortages and has warned states that federal companies will curb their power supplies if they are found selling electricity on power exchanges to cash in on surging prices.

Most of India's 135 coal-fired power plants have fuel stocks of less than three days.

Meanwhile, Coal Minister Pralhad Joshi earlier today said that the closure of some mines, and inundation of a few others due to monsoon led to the crisis but there is no need to panic as the situation is improving.

Visiting the Ashoka mine of the Central Coalfields Ltd (CCL) at Piparwar in Chatra district of Jharkhand, Joshi said the power plants in the country will continue to receive the required amount of coal.

"We are witnessing an improvement now," he said, asked about the current situation.

The minister held discussions with officials of CCL and Eastern Coalfields Ltd (ECL) on the prevailing situation.

"We can produce two million tonnes of coal per day," he said, asserting the need for producing more coal.

Closure of some coal mines and inundation of a few others due to monsoon led to the hindrance in coal supply to power plants, Joshi told reporters.

The minister also discussed the issue related to the availability of land for mining at the meeting.

A solution will be found with the cooperation of all, including the district administration, he said.

On October 9, Delhi Chief Minister Arvind Kejriwal wrote a letter to Prime Minister Narendra Modi claiming that there is a coal shortage situation that has affected the power generation plants supplying power to NCT and requested him to intervene in the matter.

Following this, the Ministry of Coal reassured the country that ample coal is available in the country to meet the demand for power plants.

With inputs from agencies

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