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SCCL likely to cut coal supply to cement cos

SCCL likely to cut coal supply to cement cos
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The cement industry is in for a shock from March onwards as Singareni Collieries Company Limited (SCCL) is learnt to have decided to cut down on the coal supplies to the cement industry in order to meet the ever growing demand of thermal power units in Telangana and Andhra Pradesh.

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Hyderabad: The cement industry is in for a shock from March onwards as Singareni Collieries Company Limited (SCCL) is learnt to have decided to cut down on the coal supplies to the cement industry in order to meet the ever growing demand of thermal power units in Telangana and Andhra Pradesh.

  • To cater more to power plants in AP, TS
  • It may lead to cement price hike: Analysts

According to SCCL General Manager S Chandrasekhar, at present, 66 per cent of the produced coal is given to the thermal projects owned by APGENCO and TSGENCO. The thermal units in both the States could not generate power to their optimum installed capacity due to shortage of coal in the last five months. They have been mounting pressure on SCCL for increased supply of coal to bridge the demand and supply gap.

The total installed capacity of thermal projects in Telangana was 2,745 MW and in AP the installed capacity was 2350 MW. The projects could generate power only 60 per cent of their total capacity, resulting in power holiday for industrial sector and power cuts for agriculture and domestic sectors.

As such, left with no option, the SCCL is said to have come up with the proposal to reduce supplies to the cement industry. Analysts feel that this could have adverse impact on the cement industry and may even lead to hike in cement prices. After the bifurcation of state, cement prices skyrocketed in both the states.

The prices had soared up by 40 per cent – from Rs 210 per 50 kg bag to Rs 310to 330. At present each bag costs around Rs 230 to 250 depending on the brand in both states. Sources contend that the coal from SCCL is more suitable for cement industry than thermal power plants. SCCL coal has more of ash content at 35 to 40 percent.

Such coal is more suitable for cement industries. Meanwhile, SCCL is said to have come across several instances of misuse of allocated coal by the cement companies. Presently, 16 per cent of the total coal coal production (1.6 lakh tonnes of coal produced everyday) is allocated to the cement industry and another 6.6 per cent to captive power plants maintained by them..

By:Patan Afzal Babu

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