Commodities

NALCO faces coal scarcity due to train shortage

Reuters | Updated on: Apr 25, 2022

A file photo of coal-loaded wagons

A file photo of coal-loaded wagons | Photo Credit: Arunangsu Roy Chowdhury

WIth the diversion of coal for power generation, coupled with shortage of wagons, the NALCO’s inventories to last only four days

BHUBANESWAR/NEW DELHI Aluminium producer National Aluminium Co Ltd (NALCO) is facing a coal supply shortfall, due to supplies being diverted to priority electricity generation and a shortage of trains to deliver fuel to its power plants.

Daily supplies to NALCO were falling short of requirement by at least 5,000 tonnes due to the train shortage, a senior company official told Reuters, adding that the company had coal inventories that would last only four days.

The government had diverted coal supplies from the non-power sector, and put on hold plans for some fuel auctions, in a bid to ensure coal availability for utilities and tackle widespread power outages across the country.

There is also a general shortage of trains to move coal around the country. Indian Railways has fallen short of utilities' requirements by 16 per cent in the first half of April, a government official familiar with the matter said.

NALCO data seen by Reuters show that supplies by state-run Coal India under a long-term supply deal fell short of the contracted quantity by 17 per cent in 2021-22, while shortfalls were more than 75 per cent under another related deal.

A shortage of trains to deliver coal to utilities is exacerbating supply crisis which has lead to power cuts across the country.

Prioritise coal movement

Mahanadi Coalfields (MCL), the Coal India unit which supplies NALCO, said it has sufficient coal and has asked NALCO to prioritise moving coal via conveyor belts and trucks instead of using trains. It said it was prioritising the sending of coal via rail to power stations.

The NALCO official said it was not possible to increase transport by road due to "logistical challenges".

The NALCO Officers' Association is taking legal action over the coal supply shortfalls, alleging poor planning by the Centre and the various state bodies involved.

"The lopsided prioritisation of the union government and the lackadaisical attitude of the railways has triggered the present crisis," said Subir Palit, a lawyer representing the NALCO Officers' Association, which has taken the coal ministry, MCL and a unit of the Indian Railways to court over the supply shortfalls.

Published on April 25, 2022
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