Coal supplies to non-power sector down 28% from FY20 levels

The coal supplied by mining companies to non-power sector (NPS) industries — steel, cement, sponge iron, and their captive power plants (CPPs) — during FY22 was the lowest in the last 10 years. This further reinforces the claim by these industries of a continuous decline in their share of the key commodity in favour of the power sector.

According to the latest data from the Coal Ministry, these four NPS industries were cumulatively despatched 59.68 MT raw coal in FY22, a year-on-year decline of 15 per cent from Covid afeected FY21’s 70.36 MT, and a steeper 28 per cent decline from non-pandemic FY20’s 82.45 MT.

During FY22, CPPs were supplied 35.60 MT of coal. During the same period, the steel, cement and sponge iron industries were supplied 8.13 MT, 7.57 MT and 8.38 MT, respectively.

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Coal supplied to CPPs and the steel industry was at its second lowest level since FY12 while the despatch to the sponge iron sector was at the lowest, and that of cement was the third lowest in the last decade.

Declining coal supplies to NPS

The highest coal despatch to the NPS industries was made in FY13 at 108.14 MT, followed by FY15 (102.343 MT), FY14 (99.894 MT), FY18 (97.216 MT) and FY19 (95.879 MT), data from the Coal Directory of India revealed.

This data strengthens the claims made by the NPS industries over the constant reduction in their supplies from 3.6 lakh tonnes per day (LTPD) in 2021 to 2.75 LTPD from March 18, against a daily average requirement of 5 lakh tonnes.

NPS complain to PMO

Last month, the Aluminium Association of India (AAI) in a letter to the Principal Secretary to the Prime Minister, PK Mishra, said Coal India (CIL) has been able to tide over the coal supply crisis in the Power sector. However, it has adversely impacted NPS industries, particularly the CPPs, which continue to struggle for un-interrupted coal supplies and are facing depleted stocks of 3-4 days against the prescribed level of over 15 days.

Coal supply to NPS declined by 12 per cent, from 61 MT to 58 MT, during the September–February period in FY22, while supplies to Power sector rose 11 per cent, from 248 MT to 305 MT. This resulted in a backlog of over 2,000 railway rakes as NPS industries get 16 rakes per day against over 300 rakes being supplied from CIL, the letter added.

“This prevailing crisis has further aggravated with the recent directions of CIL and its subsidiaries (of March 17) to curtail coal supplies for NPS not only through rail mode, but also via road mode. This new adhoc decision without any advance notice has brought the industry to a standstill and left it with no time to devise any mitigation plan to continue sustainable operations,” AAI said.

On March 17, CIL said that the miner and its subsidiaries will supply 2.75 LTPD of coal to NPS industries, against the earlier mandated 3.6 LTPD. The order came into effect a day later.

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