Paper mills seek PM’s intervention as coal costs surge 50% in two months

Mumbai: The Indian Paper Manufacturers Association (IPMA) has sought urgent intervention from the Prime Minister over inadequate coal supplies and irregular railway rake availability, stating that escalating fuel costs and dwindling coal stocks are severely affecting paper mill operations across the country.

The IPMA in a statement said that coal costs have increased by over 50 per cent in the last two months and may lead to some paper mills stopping production due to commercial unviability.

In a representation to the Prime Minister, IPMA has requested priority allocation of coal and movement through railway rakes to the pulp and paper industry's captive power plants on par with thermal power plants.


The Association has also sought directions to ensure regular allocation of at least 75 per cent of the coal quantity covered under Fuel Supply Agreements (FSAs) or linkages.

Energy accounts for approximately 15-20 per cent of the total cost of paper production. The sharp increase in coal costs is therefore placing substantial pressure on manufacturing economics at a time when domestic producers are facing intense competition from predatory imports, as per the Association.

"Assured coal supplies are essential for the continuity of paper production. Mills require uninterrupted steam and electricity, and uncertainty in fuel availability directly affects their ability to operate.

"With coal costs rising sharply amidst a crunch in availability, urgent intervention is needed by the government to prevent further disruption," said Pawan Agarwal, President, IPMA.

He added that domestic paper manufacturers are caught between rising production costs and predatory imports of paper and paperboard.

"They have limited room to pass on higher fuel costs, placing margins and the viability of operations under increasing strain. Ensuring dependable supplies of linkage coal and adequate railway rakes would provide some relief," Agarwal said further.