Bharat Coking Coal (BCCL), a subsidiary of Coal India (CIL) has ruled out the possibility of any cut in the prices of coking coal for the annual long-term supply of the raw material to its consumers in 2009-10 despite softening of the prices in the international market.
At present, BCCL supplies washed coking coal to its steel consumers in the domestic market, at Rs 6,300 per tonne. The average prices of coking coal in the international market were presently ruling around $120-130 a tonne.
Tapas K Lahiry, chairman and managing director, BCCL said, “As of now, no domestic steel-maker has approached us to negotiate a cut in the price of coking coal. We are in no position to slash the price of coking coal as our price is still reasonably low compared to the prevailing international prices.”
With the fall in the global prices, the domestic steel makers are procuring coking coal from BCCL were expected to bargain for lower price of the raw material for their annual contract beginning April 1 this year.
According to industry estimates, BCCL meets about 20 per cent of the coking coal requirements of Steel Authority of India (SAIL).
All major domestic steel makers meet a majority of their coking coal requirements through imports. JSW Steel was negotiating lower prices for coking coal with its international suppliers after Japanese steel makers clinched the coking coal contracts last month.
More From This Section
In the international mar-ket, Nippon Steel Corporation and JFE Steel Corporation of Japan are reported to have clinched the annual coking coal contract, beginning April 1 this year with BHP Billiton recently for hard coking coal, around $130 a tonne, which is about 60 per cent less than the price paid by Asian steel makers in 2007-08.
The average price of coking coal in the international market jumped from $96 a tonne in 2007 to touch a high of $300 in 2008. Australia-based Macquarie Group, a global provider of banking, financial and advisory services has forecasted a benchmark price of coking coal at $110 per tonne for 2009.
Asked on the proposed development of BCCL’s three underground mines, Lahiry said, “We are awaiting the approval from CIL to go ahead with this project. Once CIL gives its approval, the Central Mine Planning and Design Institute (CMPDI), a subsidiary of CIL would prepare the tender document and we will invite global tenders for developing these mines.”
Each of these three identified underground coal mines has an estimated reserve of 20-40 million tonnes with a mining capacity of about one million tonnes per annum.
BCCL planned to rope in global mining firms with proven expertise in underground mining to develop and operate the mines. The selected firms will employ state-of-the-art technology to develop these mines.