Sponge iron producers in India are raising concern fuel supply contracts won\u2019t be renewed as the nation\u2019s state-run coal miner continues to prioritize power plants in an effort to avoid blackouts. <\/p>\n
Supplies from Coal India Ltd. for some producers are scheduled to end from August, which means the companies will be forced to rely on vastly more expensive imported fuel, said Anil Nachrani, president of the Chhattisgarh Sponge Iron Manufacturers Association. <\/p>\n
The producers in Chhattisgarh have appealed to the state miner to renew their pacts and are seeking talks with Coal Minister Pralhad Joshi, according to Nachrani. <\/p>\n
Supply pacts for coal deliveries can be renewed if both parties agree, or instead awarded through an auction process that India\u2019s government introduced in 2016 to boost transparency. <\/p>\n
Coal India plans to follow the policy to auction supply contracts, it said in a response to requests for comment. The company did not specify when any new auctions will take place.<\/p>\n
The state miner is under pressure to boost stockpiles at power plants during the current monsoon season, which typically disrupts coal production and transport. Coal accounts for 70% of India\u2019s electricity production and efforts to prevent any disruptions are coming at the cost of industrial users.<\/p>\n
Inventories at power plants rose to an average of 10 days supply on Sunday, well below required levels of more than three weeks, and about 18% lower from a year earlier. India\u2019s power ministry is pushing plants to import more fuel and Coal India this month issued a first-ever tender to procure material from overseas.<\/p>\n
India\u2019s domestic coal is subsidized and international prices have surged to a record, stoking concern among industrial consumers who face having cheaper supplies from local mines restricted.<\/p>\n
Chhattisgarh is among India\u2019s key production hubs. \u201cWe\u2019re sitting right in the middle of coal mines,\u201d said the sponge iron association\u2019s Nachrani. \u201cAsking us to import is like asking someone in Middle East to import oil.\u201d<\/p>\n
India experienced its worst coal crunch in years in 2021 as a prolonged monsoon season flooded mines and choked shipments. Higher electricity demand in recent months coupled with a global squeeze on fuel supply that\u2019s lifting prices mean officials remain wary over the potential for electricity shortages. <\/p>\n
\u201cCoal India certainly doesn\u2019t want a repeat of last year\u2019s supply problems,\u201d said Rupesh Sankhe, vice president at Elara Capital India Pvt. in Mumbai. \u201cThe message from the government is very clear — prevent blackouts at any cost.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"
Sponge iron producers in India are raising concern fuel supply contracts won\u2019t be renewed as the nation\u2019s state-run coal miner continues to prioritize power plants in an effort to avoid blackouts. Supplies from Coal India Ltd. for some producers are scheduled to end from August, which means the companies will be forced to rely on vastly more expensive imported fuel, said Anil Nachrani, president of the Chhattisgarh Sponge Iron Manufacturers Association. The producers in Chhattisgarh have appealed to the state miner to renew their pacts and are seeking talks with Coal Minister Pralhad Joshi, according to Nachrani. Supply pacts for […]<\/p>\n","protected":false},"author":40,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[131],"tags":[],"class_list":["post-501394","post","type-post","status-publish","format-standard","hentry","category-coal"],"acf":[],"_links":{"self":[{"href":"https:\/\/infralive.com\/web\/wp-json\/wp\/v2\/posts\/501394","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/infralive.com\/web\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/infralive.com\/web\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/infralive.com\/web\/wp-json\/wp\/v2\/users\/40"}],"replies":[{"embeddable":true,"href":"https:\/\/infralive.com\/web\/wp-json\/wp\/v2\/comments?post=501394"}],"version-history":[{"count":0,"href":"https:\/\/infralive.com\/web\/wp-json\/wp\/v2\/posts\/501394\/revisions"}],"wp:attachment":[{"href":"https:\/\/infralive.com\/web\/wp-json\/wp\/v2\/media?parent=501394"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/infralive.com\/web\/wp-json\/wp\/v2\/categories?post=501394"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/infralive.com\/web\/wp-json\/wp\/v2\/tags?post=501394"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}