 "SAIL in talks with CIL over coking coal price hike")
Worried over domestic coking coal price hike effected by state-owned CIL, the country's largest steel maker SAIL on Monday said it is in negotiations with the miner on the issue as it is difficult for the company to absorb the increase.
"We are under negotiations with them and working model will come out," Steel Authority of India Ltd (SAIL) Chairman P K Singh told PTI on Coal India Ltd's recent hike in coking coal prices.
CIL arm Bharat Coking Coal Ltd this month increased the prices of coking coal by about 20%.
Another subsidiary of the world's largest miner Central Coalfields Ltd has also increased the price of metallurgical coal this month.
"We are in dialogue with them (CIL). We have told (them) that at this stage it is difficult for us to absorb (the hike in coking coal price). They have agreed to form a committee," Singh said.
The panel which will be constituted will have members from both the state-owned firms.
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SAIL too is a state-owned firm and is a prime consumer of coking coal as well as a major customer of CIL's metallurgical coal.
"We have an MoU with Coal India. Once we are in that MoU, that pact remains applicable for the entire financial year. MoU means we also have an assured offtake from Coal India and we take coking coal from them. We take domestic coking coal supply only from Coal India," Singh said.
According to an official, the price of various grades of coking coal of CIL varies between Rs 2,400-Rs 5,050 per tonne.
He said SAIL was unable to recover its cost of production and there was a lot of pressure on its operations.
On the possibility of price increase by the steel PSU, he said, "it will depend on market situation". Of its total requirement, SAIL imports 86% of metallurgical coal, while the rest is sourced indigenously.
The steel PSU's existing captive coking coal production is nearly 0.5 million tonnes per annum.
The global coking coal price, which was at $80 per tonne in January last year, rose to $283 per tonne in December, Indian Steel Association Secretary General Sanak Mishra said.
However, in early January, the global price of metallurgical coal came down to $193 per tonne, Mishra said.