Coal supply woes threaten NALCO's Angul unit

By Biman Mukherji

NEW DELHI (Reuters) - A shortage of coal is threatening power supplies to the only aluminium smelter run by National Aluminium Co. Ltd. (NALCO), a company source told Reuters on Friday.

The official said two of seven power units which feed the smelter at Angul in Orissa were shut this month as not enough coal was being supplied by local mines and transport shortages hit attempts to bag alternatives.

So far aluminium production at India's second-largest producer has not been affected, the official said, as state-run NALCO has been buying power from the public grid.

To compensate for the closures, the firm would need to buy 80-90 MW a month at a cost of about 500 million rupees ($12.43 million), he said.

"We don't have coal, so we have switched off two units of power plants. Now five units are running and we are importing power," the official, who is based at Angul, added.

Angul has a daily aluminium output of slightly less than 1,000 tonnes per day and annual production of about 350,000 tonnes.

The plant usually has seven power units with a capacity of 120 MW each running, which need about 14,500 metric tonnes of coal per day. An eighth power unit is kept on standby.

Coal is primarily supplied by Mahanadi Coal Field Ltd.'s Bharatpur Mines in Orissa, with which Angul has a rail link. But some fuel must now come from other mines for which no railway wagons were available.