Coal news and updates

Coal supply shortage hurts top metals, cement makers

India's top metals and cement makers are hurt by a fall in the availability of coal from state-owned Coal India Ltd (CIL NSE 0.63 %) and its subsidiaries, which are sending more of the dry fuel to the power sector while cutting down the supplies to other users."We heard from CIL that there is no sufficient coal available and that is why they have stopped the supplies. Our stock as of today is available for the next two days," said an executive at a top steelmaker, requesting anonymity.Steelmakers that process DRI (direct reduced iron) use thermal coal and keep stock for 12-15 days, which has now come down to 3-4 days for most. For them, the daily consumption is around 10,000-12,000 tonnes of coal.

Industry insiders said top players like Jindal Steel & Power, Vedanta NSE 1.59 %, Hindalco NSE 4.37 % and JSW Steel will be impacted due to this development."The situation is grave. We are mulling reducing the production if this continues," said another executive of a manufacturer of primary steel.

Coal India arm Mahanadi Coalfields on Tuesday informed the railways that it has decided to restrict the loading of non-power category rakes to enhance dispatches to the power sector. "Therefore, it is requested to restrict supply to non-power category customers to a maximum of 2 rakes from the sidings of IB coalfield to maximise dispatch to powerhouses having less than l0 days' stock," the company said in a letter to the chief freight traffic manager at the South East Central Railway in Bilaspur.

Mahanadi Coalfields said this has been discussed and a joint decision made by the coal players and the ministries of coal, power and railways.