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Vedanta warns of aluminum production cuts on coal curbs

Samir Cairae, CEO of Vedanta Ltd.'s metals business in India, warned that the company may reduce aluminum output if limits on coal supplies to the country's nonpower sectors continue for another week, Bloomberg News reported May 24.

The limited coal supply is a result of a government directive to prioritize coal deliveries to power stations as India's private and public thermal power plants face severe coal shortages amid rising electricity demand, Mining Weekly reported the same day.

State-owned Coal India Ltd. stopped supplies to nonpower sectors from May 18, with subsidiary Mahanadi Coalfields Ltd. issuing similar orders.

According to Cairae, Vedanta's Jharsuguda aluminum smelter in Odisha has one day's worth of coal stockpiles remaining. The smelter, with a capacity of 1.7 million tonnes per year, could shutter some units in a bid to avoid a complete shutdown, given that a restart would require at least six months.

Among Vedanta's options to keep the smelter running are coal imports and purchasing electricity from the grid.