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FIMI writes to govt for coal allocation, industry at near stand-still, it says

Suresh P Iyengar Mumbai | Updated on October 08, 2021

Mineral industries body says threat of factory closure, job losses looming

The ongoing coal crisis has bought captive power plant-based steel, aluminium companies and MSMEs across diverse sectors to nearly a grinding halt, according to mineral-based industries.

In a letter written to Ministry of Coal, RK Sharma, Secretary General, Federation of Indian Mineral Industries, said the current acute coal crunch due to various factors has created a precarious situation for coal consumers mainly for steel and aluminium industry falling under non-regulated sector (NRS).

The industry is almost at a standstill and is left with no time to devise any mitigation plan to sustain operations, it said.

The power plants are running at critically low coal stocks and forced to operate at much reduced capacity with huge risk of facing plant closure and threat of job losses looming, besides threatening domestic value addition, the letter added.

Coal linkage auction

Since September 2018, no exclusive coal linkage auction for CPP has been held, while quantity of coal being offered through spot e-auction by road mode is insufficient. Following this, the premium in recent auction has skyrocketed making it unviable for the NRS coal consumers, said Sharma. Earlier, the coal linkage auctions were envisaged to be held every six months. The sharp rise in imported coal price and spike in freight cost have resulted in a double whammy for the beleaguered industry riding on the Government’s vision to make a ‘Self Reliant India and Make in India’, he added.

‘increase rake allocation’

The industry body has urged the Coal Ministry and Coal India to expedite exclusive e-auction for NRS consumers through rail mode to provide some relief for consumers and increase rake allocation on priority.

The Federation has also urged Coal India to allocate coal dispatches in the ratio of 75 per cent for power companies and 25 per cent for non-power sectors in line with Ministry of Coal diktat in 2016 for auction linkage.

Published on October 08, 2021

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