Water usage regulations in Maharashtra hit coal production

The regulation on industrial usage of water in Maharashtra has ended up impacting coal production in the country as explosives are in short supply. India’s largest miner CIL’s is reportedly producing at least 10 per cent below potential for the past one week. Production of the Ranchi-based Central Coalfields (CCL) is among the hardest hit.

CIL alone accounts for over 70 per cent of the total 7 lakh tonne explosives consumed in the country, annually.

Fuel supplies, however, remain unaffected as the State-owned Coal India built huge pit-head inventory on year-end production rush. Also, power plants are flushed with 26 days inventory, higher than the normative requirement of 21 days.

According to the Central Electricity Authority, not a single power station is suffering from critical coal stock.

Explosives are used in removing the upper crust of earth to expose the mineable reserves. In coal sector, explosives are also used in less or non-mechanised underground and opencast mines to blast open the coal seams.

Such usages are prevalent in CIL subsidiaries such as CCL, Asansol-based Eastern Coalfields (ECL), Dhanbad-based Bharat Coking Coal (BCCL) and Nagpur-based Western Coalfields (WCL).

The trouble started three weeks ago, as Maharashtra government started regulating water supplies — as a contingency measure to mitigate shortage of potable water in the State — at one of its largest industrial areas.

It impacted operations of nearly 500 industrial users, including India’s largest ammonium nitrate-supplier Deepak Fertilisers and Petrochemicals. From one day in a week, the supply restrictions were increased to three days a week, resulting in nearly 30-per cent drop in Deepak’s production.

Ammonium nitrate is a raw material to produce explosives. Apart from Deepak, GNFC and RCF are two other producers of the chemical. While Deepak’s production was sliding, GNFC went to scheduled maintenance shutdown from March 29.

A rough calculation suggests, net ammonium nitrate supplies were down by barely 10 per cent at its peak as against approximately 30-per cent excess explosive production capacity in the country.

It means drop in supplies were manageable. CIL was more impacted by sudden disruption in the supply chain. As per existing regulations, users cannot store more than three days’ stock of explosives.

Meanwhile, responding to an SOS from Coal India, GNFC resumed ammonium nitrate production nearly 10 days ahead of schedule, on April 11. Sources say, the plant is now running at 60-per cent capacity and will enter full production mode in the next couple of days. Deepak too is improving supplies using alternative measures.

Some CIL outfits such as ECL, which has the largest share of underground mines, report improvement in explosive supplies. CIL has also gone in for a rejig in its explosive vendor portfolio.

An interesting outcome of the whole fiasco is revival of Deepak’s proposal to put up a second ammonium nitrate facility at Paradip petrochemicals zone. Odisha government sources report sudden movement on the investment proposal, mooted last year.

Deepak Fertilisers didn’t respond to queries on the issue.

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