The coal supply gap for non-power sector (NPS) industries such as captive power plants (CPP), steel, cement and sponge iron widened further in February 2022. Cumulatively, the sectors were supplied 4.47 million tonnes (mt) of the dry fuel, lower by 43.7 per cent from February 2020 (7.94 mt). During January 2022, coal despatch to these four was 6.36 mt, a decline of 17 per cent against 7.68 mt in the same month in 2020.

Even the coal despatches in February 2022 were down 23 per cent against the Covid-19 impacted February 2021 (5.81 mt). During the April-February period in FY22, coal despatch to these four fell 28.4 per cent at 53.94 mt compared to 75.31 mt in April-February FY20. Compared to April-February FY21 (64.12 mt), supplies fell 16 per cent.

Overall, India’s coal despatches rose 7.5 per cent to 71.27 mt last month from 66.31 mt during February 2020. In February 2022, Coal India (CIL) and Captives/Others registered a growth of 4.90 per cent and 38.17 per cent by supplying 57.47 mt and 8.38 mt of coal, respectively. In comparision, Singareni Collieries Company (SCCL) registered a negative growth of 0.81 per cent by despatching 5.41 mt compared to 5.46 mt in February 2020.

Several industries have complained that coal supplies are being diverted to the Power sector as a priority. The despatch to power utilities grew 15.27 per cent to 60.06 mt in February 2022 compared to 52.10 mt in February 2020.

Consistent decline in supply to NPS

Except for the Power sector, the supplies to all other industries, except Others, again fell in February. For instance, coal dispatch to CPPs fell by over 51 per cent to 2.48 mt in February this year against the same month in 2020. Similarly, supply to Steel, Cement and Sponge Iron declined 16.88 per cent, 26.40 per cent and 43.09 per cent to 0.70 mt, 0.63 mt and 0.66 mt, respectively, during the same period.

CIL, SCCL and others have been ramping up coal production consistently in the past few months, but analysing the data shows that coal supply to Cement, Steel and Sponge Iron industries has been consistently down since October last year. The coal dispatch to CPPs has also been declining since November 2021, however supply by captives has risen consistently in the last six months.

Railway rakes backlog

The NPS industries have claimed that they are receiving less than 3 lakh tonnes of coal per day against their requirement of 5 lakh tonnes daily for operations. They claim that the low availability of coal for NPS is due to the diversion of rakes to the Power sector in the name of “Priority”. The curtailment in coal supply by rail (rakes) and road and road-cum-rail (RcR) in the last 2-3 months has severely impacted NPS industries, many industry associations have complained.

Amidst the coal shortage at thermal power plants, the Indian Railways also ramped up the rakes carrying the dry fuel. However, against a daily average loading plan of 338 rakes in February 2022, the actual average loading of 296.3 rakes was achieved. In February last year, an average actual loading of 285.7 rakes took place. 

However, the average actual loading in February is the highest in FY22 (April 2021-March 2022). The daily average rakes supplied in January (285.4) is the third-highest this fiscal year, after December 2021 (289).

Industry complains to PMO

Industry body Aluminium Association of India (AAI), in a February 25 letter to the Principal Secretary to the Prime Minister, P K Mishra said, “We humbly request your kind intervention and immediate support for resumption of un-interrupted coal supplies and rakes for highly power intensive aluminium industry CPPs, which are facing alarmingly depleted coal stocks of 3-4 days as compared to the prescribed level of over 15 days”.

The coal supply to the non-power sector has been significantly declined by 18 per cent for NPS over the September 2021–January 2022 period. Although, the overall coal supply from CIL has started improving currently, still the dispatch from major CIL subsidiaries like MCL, SECL, etc. is not sufficient to cater to the requirement of NPS/CPPs and needs to be ramped up to cater the requirement of industry for continued sustainable operations, it added.

Pointing out that there is a backlog of 1,200 rakes, AAI claimed, “Most of the available coal & rakes are being diverted away to the Power Sector as ‘Priority Coal Supplies’, while the CPPs are starving and facing acute coal crunch”.