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Industry bodies seek PM’s intervention to resolve prolonged coal crisis

The trade associations have demanded that the standard policy of Ministry of Coal (CCEA approved) must be strongly implemented to ensure adequate coal supply to both power and non-power sectors.Premium
The trade associations have demanded that the standard policy of Ministry of Coal (CCEA approved) must be strongly implemented to ensure adequate coal supply to both power and non-power sectors.

  • Eight industry associations representing the fertilizer, paper, textile, aluminium, sponge iron and other industries have said that the persistent coal crisis is hurting the overall industry, especially the power intensive plants and small and medium enterprises and forcing them to operate at reduced capacities with a looming risk of business closure

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NEW DELHI : With several industries reporting continued coal shortages since August 2021, the non-power sector (NPS) including the captive power plant (CPP)-based industries dependent on stable coal supplies for uninterrupted operations have reached out to Prime Minister Narendra Modi seeking urgent steps to resolve the continuing coal shortage.

In a joint representation, eight industry associations representing the fertilizer, paper, textile, aluminium, sponge iron and other industries have said that the persistent coal crisis is hurting the overall industry, especially the power intensive plants and small and medium enterprises and forcing them to operate at reduced capacities with a looming risk of business closure.

A joint statement from the industry bodies said that the substantial curtailment in coal supply through rail and road modes in recent weeks has pushed NPS coal consumers to the extent of "severely catastrophic" conditions. The coal requirement of non-regulated sub-sectors is around 25-30% of the total coal production and requires around 5 lakh tonne of coal daily for sustainable operations. However, they have been receiving less than 3 lakh tonne of coal every day which is leading to derailment of operations and rampant losses.

Further, according to the statement, there is a huge pendency of rakes (4,000 rakes) for the non-power sector from most of Coal India Limited (CIL) subsidiaries. The representation claims that lack of rake movement in linkage auction, exclusive and spot e-auction routes has caused many industries to depend on coal supply through road which is neither adequate and nor financially viable.

"Also, the high cost of imported coal coupled with high ocean freight rate means that a large number of industrial units simply cannot afford to take that route and have to depend on indigenous coal. Industries with integrated captive power plants (CPPs) are not able to fulfill their power requirement entirely from the grid, because of the basic design of the transmission and distribution system," it said.

The representation states that at a time when Coal India Ltd's production level has increased by 7% month-on-month basis, there is no rationale behind curbing supplies to the non-power sector.

The trade associations have demanded that the standard policy of Ministry of Coal (CCEA approved) must be strongly implemented to ensure adequate coal supply to both power and non-power sectors. 

The representation has been jointly submitted by Coal Consumers’ Association of India, Confederation of Indian Textile Industry, Indian Captive Power Producers Association, UP Paper Mill Power Plant Owners Association, Aluminium Association of India, Sponge Iron Manufacturers Association, Fertiliser Association of India, and Vidarbha Industries Association. 

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