New Delhi: Prioritization of domestic coal supply for the power sector has “to some extent” affected Hindustan Zinc, but the company has cushioned itself by blocking the supply of imported dry fuel until March said a senior official at the Vedanta group company.

Coal India, which accounts for over 80 percent of national coal production, has temporarily prioritized fuel supply to the power sector due to low inventories at thermal power plants.

Hindustan Zinc’s annual coal consumption is around 2 million tonnes and it uses a mix of imported and domestic fuels in its smelters, HZL CEO Arun Misra Misra told PTI in an interview.

When asked if the company’s domestic coal supply had been affected due to the prioritization of coal over the power sector, “Yes, to some extent it is affected. So it can be temporarily. We would see more consumption of imported coal … in two or three months domestic coal should be available in sufficient quantity. ”

“In terms of price… this is the first time that it is impacted on the cost side. The increase in costs is also due to the availability of the coal blend,” said the CEO, when asked about the impact. of the coal shortage on the business. .

Electricity, he said, is an important catalyst for metal production in smelters and coal is the input to the company’s power plant.

“About 20-25% of our production costs can be attributed to the cost of coal, and if you look at the coal mix, 70-75% is imported coal and about 20-25% or 30% is domestic coal. If I say between the price of coal and the availability, currently to ensure the availability of production must be guaranteed, so we have blocked the supply of imported coal until about March, ”explained Misra.

The government, he said, has clearly focused on energy suppliers first when it comes to prioritization of allocation.

“So at least it’s (it’s) good for us too. Even if we assume we should run out of our own power generation, we should depend on the grid and even if the government prioritizes suppliers of electricity. energy in a grid in a way that the power is only ours, so whether the government allocates coal to us or gives us power back and forth is fine with us, ”he explained.

But nonetheless, Misra said, the company would like an additional amount of domestic charcoal to reduce the cost impact.

“We have reserved coal for ourselves. But the priority of the government right now is more for energy producers or electricity producers other than metal producers. So we have protected ourselves with imported coal and whatever is available in the country, we are consuming, ”he said.