India's aluminium producers seek resumption of supply from Coal India

The Aluminium Association of India (AAI) demanded immediate resumption of supplies under long term linkages for the survival of the domestic industry in the face of coal shortage.

In a memorandum submitted to the Chairman, Coal India Limited (CIL) on Wednesday - the second in the past three months - the association said that the current coal crunch has created a precarious situation for the highly power intensive aluminium industry, where coal accounts for nearly 40% of the production cost.

The AAI questioned the decision of the Centre to stop coal supplies and rakes to non-power sectors. It said the move would be detrimental to and jeopardize its sustainability.

"Aluminium smelting requires uninterrupted quality power supply for production which can be met only through in-house captive power plants which operate 24×7 and 365 days and have signed fuel supply agreement with CIL and its subsidiaries for assured long term coal supply," read the memorandum.

Demands made by AAI in its memorandum include an immediate resumption of coal supply for aluminium industry CPPs against secured linkages and allocation of rakes to aluminium plants on a priority basis. It also seeks an expedition of coal linkage auctions/exclusive e-auctions for Captive Power Plants through rail mode at the earliest.