The state-owned Indian aluminum producer National Aluminum Co. Ltd. (NALCO) is facing a shortage of coal supplies due to the diversion of supplies to priority power generation and a shortage of trains to deliver fuel to NALCO’s power plants.
Daily deliveries to NALCO fell short of demand by at least 5,000 tonnes due to the train shortage, a senior official at the company told Reuters, adding that the company had coal stockpiles that would last just four days.
India has diverted coal supplies from the non-power sector and shelved plans for some fuel auctions to ensure coal availability for utilities and deal with widespread power outages across the country.
There is also a general shortage of trains to move coal across the country. State-run Indian Railways failed to meet utility demands by 16% in the first half of April, a government official familiar with the matter said.
NALCO data, seen by Reuters, shows state-owned Coal India’s 2021/22 supplies under a long-term supply deal were 17% below contract, while deficits under another related deal were more than 75%.
A shortage of trains to deliver coal to utilities is exacerbating a coal supply crisis that has caused power outages across the country.
Mahanadi Coalfields (MCL), the Coal India unit that supplies NALCO, said it had enough coal and had asked NALCO to prioritize transporting coal via conveyors and trucks rather than using trains. It said it prioritizes transporting coal to power plants by rail.
The NALCO official said it was not possible to increase road transport due to “logistical challenges.”
The NALCO Officers’ Association, a charity for the company’s executives, is taking legal action over coal supply shortages, alleging poor planning by the Indian government and the various agencies involved.
“The union government’s unilateral prioritization and the lax stance of the railways have precipitated the current crisis,” said Subir Palit, a lawyer representing the NALCO Officers’ Association, which took over the Ministry of Coal, MCL and a unit of Indian Railways over supply shortages Court.
