National Aluminium may buy coal locally to maintain output

August 6th, 2008 - 8:50 pm ICT by IANS  

Bhubaneswar, Aug 6 (IANS) India’s second largest aluminium maker National Aluminium Co Ltd (NALCO) may start buying coal from the local market, according to a top company official. The move is aimed at overcoming the severe coal shortage that the public sector company’s alumina refinery is facing due to lack of supply from its main and contracted coal supplier Coal India, C.R. Pradhan, NALCO’s chairman, told IANS here Wednesday.

Last week production at the company’s refinery at Damanjodi, some 500 kilometre from here, in Koraput district of Orissa, fell to almost half its capacity due to coal shortage.

There was no supply of coal from Coal India for almost 10 days till Thursday last week, Pradhan said at the firm’s head office here. The plant had to consume most of its buffer stock of coal just to keep the plant running partially, he added.

Coal stocks have improved since Thursday after the coal ministry instructed Coal India to resolve the problem. The refinery has been able to resume production at full capacity but it is still struggling to obtain adequate supply of coal, Pradhan said.

“The company needs to maintain a buffer stock of about 50,000 tonnes to smoothly run the refinery but we now have a stock of only 16,000 tonnes,” Pradhan said minutes before leaving for New Delhi.

“Given the amount of coal we are receiving now, it may take at least 30 days to again build up a buffer stock of 50,000 tonnes,” he said.

“We may have to buy coal from the local market to restore the buffer stock,” he said. “We cannot import coal because our production system does not accept imported coal,” he said.

The company is exploring procurement of at least 25,000 tonnes of coal from private parties through tender, a company official who did not want to be identified said from Damanjodi.

NALCO is India’s largest manufacturer and exporter of alumina and is the flagship public sector undertaking of the ministry of mines.

It was granted Navratna status by the central government last month. The Navratna status is conferred on select central public sector enterprises (CPSEs) when they become significant players in the economic development of the country.

Although the company has drawn up ambitious growth plans to invest around Rs.400 billion in the next five years on its various expansion projects both in India and abroad, the coal supply crisis appears to have come as a shock.

Its 1,575,000 tonnes per annum alumina refinery, having three parallel streams of equal capacity, had not faced such a crisis due to shortage of coal before, since going on stream in September 1986, company officials said.

In June this year, the company had to shut down two of its seven power units at its smelter in Angul due to inadequate coal supply.

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