India's #2 Aluminum Producer May Have To Shut Down Orissa Plant On Shortage Of Coal

[hatrack]

India’s second largest aluminum producer—National Aluminium Co (Nalco)— may be forced to shut down its alumina refinery in Orissa within a few days due to acute paucity of coal. “We have received no coal from Mahanadi Coalfields Ltd (MCL) for the past seven days. Though we have managed to acquire 3,000 tonne of coal via e-auction route, it will only last for next two days,” said Nalco CMD CR Pradahan. He pointed out that the quality of coal received was very poor and contained stones too.

Daily output at the Damanjodi refinery has more plummeted to 2,000 tonne in the last few days. The Nalco refinery uses about 3,000 tonne of coal everyday to produce 4,500 tonne of alumina. “At present only one boiler is running with 1,000 tonne capacity reducing the production capacity to half. The present scarcity is on account of power stations being given first preference for coal and the directive to meet 100% requirement of the power plants,” Pradhan said.

The Navratna company is currently implementing its expansion plans and has been repeatedly hit by coal shortages. In June the company faced similar problems with its production having dipped by about 30%.

Earlier last year, the mines ministry has sought Prime Minister Manmohan Singh’s intervention in bailing out aluminum giant after it had to close down two of its captive power plants and talked of laying off its employees. The company had recently entered into the fuel supply agreement (FSA) with Coal India Ltd (CIL). This too, however, failed to ensure regular availability of coal. Under the FSA, Nalco is assured 50% of the contract volume below which the trigger level would set it.

EDIT

http://www.financialexpress.com/news/Coal-paucity-may-force-Nalco-s-alumina-refinery-to-shut-down/342157/

[varun]

1. India has 10% of world's coal reserves

second only to US and China.

And the coal mines are not far from this Aluminum plant.

They will eventually inrease coal production. More pollution...but India has limited options.

[DianaForRussFeingold]

2. Thank You! Scary thing is,the price of aluminum is already high...

When I was a kid, instead of aluminum and plastic, there were glass bottles-- recyclables,
2 cents a bottle deposit..
I would use my red wagon to return them--Buy more pop and penny candy with the money!

Your post reminded me of this article from Sunday's Post Gazette;
"Coal price soars, electric rates close behind"
Sunday, July 27, 2008
By Don Hopey, Pittsburgh Post-Gazette
'Price on spot market has quadrupled since 2000'

A coal barge works its way along the Monongahela River near the Homestead Grays Bridge.

"The spot price for northern Appalachian coal -- which includes coal mined in Pennsylvania, Maryland, Ohio, Virginia and West Virginia -- was $138 a ton last week, more than double the $55-a-ton price of a year ago and four times what it was in 2000.

Spurred by a tight coal market made tighter by a series of extreme weather events earlier this year in China, Australia and South Africa, the spike in coal prices could add another 30 percent to electric rates..."
http://www.post-gazette.com/pg/08209/899839-28.stm

[NickB79]

3. They're purchasing coal "via e-auction route"?

"Sreerama, we need more coal! Log onto E-Bay now!"