The Hindu Business Line : SAIL, RINL may broadbase Australian coal supplies

PUBLIC sector steel producers Steel Authority of India Ltd (SAIL) and Rashtriya Ispat Nigam Ltd (RINL) are trying to broadbase their coal supplies from Australia and are also studying options of importing coal from Europe and Canada.

According to sources, senior officials of both companies have just returned from Australia where they met a host of coal producers, including representatives of existing suppliers.

As of now, the three Australian coal majors, namely, BHP, MIM and Anglo Coal, are supplying to SAIL and RINL; both PSUs had faced some problem with these companies. The sources said supplies to RINL by these three companies were only up to 88 per cent of their total commitment.

As a result, the Union Steel Ministry has asked the two companies to study other sources of coal supplies in Australia.

According to the sources, the officials of SAIL and RINL had a successful visit. "Our effort was to find other ways and means of stabilising our coal supplies for the next financial year, 2004-05. Apart from BHP, MIM and Anglo Coal, we had talks with a number of other producers also," they said.

It has been learnt that RINL had already signed agreements with Anglo Coal and MIM, but could not finalise terms with BHP. "It was asking for an increase in prices but it was not possible for RINL to accept it," the sources said.

They added that both the companies were keen to go for spot purchases in Australia but could not strike a single deal because the spot prices were approximately 150 per cent over the long-term prices.

On broadbasing coal supplies from Australia, the sources said: "Talks were held with a number of players but nothing has been finalised. In fact, such deals do not mature in one trip because a number of factors are considered. In all probability, the deals would be struck soon."

In 2002-03, SAIL's annual coal requirement for its four integrated steel plants was 11.8 million tonnes, or approximately one million tonnes a month. With the growth in steel production, SAIL's monthly requirement for coking coal in 2003-04 should be around 1.2 million-1.3 million tonnes.

In 2002-03, SAIL's total payout on account of coal was Rs 3,904 crore.

On the other hand, RINL's total coal requirement during 2002-03 was 2.5 million tonnes. This requirement also went up by around 10-12 per cent due to the growth in steel production at Vizag Steel Plant.

In another move for broadbasing coal supplies, SAIL and RINL are closely studying other options too. It was learnt that they are looking at supplies from Canada, Ukraine and Poland.

"We cannot only depend on Australian coal because their mines are also facing several problems. Moreover, there are problems at the ports too. We will have to work out innovative ways by mixing our coal with the imported material," the sources added.