State-run National Aluminium Company (Nalco) has blamed Coal India Ltd (CIL) for not supplying enough in the year’s second quarter, leading to poorer financial performance of the Navratna company in this period. Nalco’s net profit during July-September was Rs 139 crore, as against Rs 224 crore in the same quarter of 2010-11, down 38 per cent.
This was due mainly to lesser and poor quality coal from Mahanadi Coalfields Ltd, a subsidiary of CIL, forcing the company to use imported and more expensive coal, buy power from the state grid and also use more of costlier heavy furnace oil, said a Nalco statement. The additional impact of power and fuel on operating cost during the quarter was Rs 149 crore, it added.
In September, Nalco had to shut about 60 of 960 smelting pots at its Angul facility due to shortfall in output in its captive power plant, following coal supply problems. As against the requirement of 950 Mw of daily power to run the smelter at full capacity, production was 640 Mw.
To meet the power requirement, it had to buy 200 Mw from Grid Corporation of Orissa at premium rates. It also had to import expensive coal from abroad.
Power cost is about 35 per cent of the expenses of an aluminium company, as a huge amount of electricity is needed to produce aluminium metal from powdery alumina.
Nalco’s sales turnover, however, grew by about nine per cent to Rs 1,689 crore against Rs 1,549 crore in the second quarter last year, on higher prices of alumina and aluminium, said the statement.
