Primary aluminium producers are facing severe coal crisis: AAI

A sharp fall in availability of coal has left aluminum producers having captive plants with no option but to import the dry fuel, thereby sharply increasing the cost of production, an industry body has said.

"Primary aluminum producers are facing severe coal crisis. There is a severe fall in coal supply. Sufficient amount of coal is not being supplied to the captive power producers," an official at Aluminium Association of India (AAI) said.

Another issue which the industry is facing is high rates of power. Players who are buying power from states are buying it at spot prices, it said.

The price for production of one tonne of aluminum has gone up by USD 237 per tonne due to increase in power costs and imported coal, the member of the association said.

Power constitutes 40 percent of overall production cost for aluminum producers.

"Spot power prices are getting out of hand. On Monday they touched over an eight-year high of Rs 14.08 per unit in the day," the association said.

The government must come forward to address the two prime issues the industry players are facing at the moment, AAI said, adding that a large amount of coal is being diverted to independent power producers (IPPs).