KOLKATA (miningweekly.com) – Indian State-run National Aluminium Company Limited (Nalco) is facing an acute shortage of coal supplies of up to almost 50% of its daily requirement to fuel its 1 200 MW of captive thermal power plant, risking the closure of its smelting potlines.

Nalco, which operates a 460 000 t aluminium smelter at Angul in the eastern state of Odisha, sources its coal requirements from Mahanadi Coalfields Limited (MCL) - an operational subsidiary of Coal India Limited (CIL) - whose mines are also in the eastern state.

Nalco requires 17 000 t/d, but is currently receiving only 8 000 t/d to 9 000 t/d, forcing the company to source about 190 MW of power from the State grid, according to a regulatory filing by the company. Three units of 120 MW at its captive power plant have been shut down in the absence of coal availability.

According to the company, buffer coal stocks available at the captive power plant site at Angul have been fully exhausted, forcing the aluminium producer to shut down 80 pots at its smelting line and possibly forcing it to shut down at least another 277 pots in the coming days with the coal supply situation unlikely to ease in the immediate future.

MCL production has been severely hit following agitation by locals demanding jobs under the miners’ rehabilitation and resettlement programme. Since October 2, the miner has failed to supply about 60 000 t of coal to its various customers, which include Nalco and Jindal Steel and Power.

According to MCL officials, about 35 000 t/d of overburden removal has been disrupted following the agitation by locals, as has 20 000 t/d of coal production from its opencast mines at Talcher and IB Valley.

Nalco’s option of seeking alternative sources of domestic coal is also limited, considering the overall falling production recorded by CIL. During the period April to September 2019, CIL recorded a production fall of 6% at 241-million tons, while offtake was down 5%, at 271-million tons, during the period compared with the corresponding months of the previous year.

The miner attributes the fall in production to heavier-than-anticipated monsoon rains and flooding of several of its key producing mines, a CIL official says, citing the example of Dipka mines, which produced about 30-million tons a year, accounting for about 5% of CIL’s total production, being badly flooded during the monsoon season, damaging critical mining equipment and operations taking at least a month to normalise.