The Hindu Business Line : SAIL agrees to pay 40% more for BCCL coal

Kolkata. May 24 Steel Authority of India Ltd (SAIL) has agreed to pay 40 per cent higher price for its coking coal procurement from Coal India in 2008-09. Compared to a price equivalent to $105 a tonne in 2007-08, the steel major would be paying prices equivalent to $150 a tonne in 2008-09.

According to the CIL Chairman, Mr Partha S Bhattacharyya, Bharat Coking Coal Ltd – a wholly owned subsidiary of Indian coal major – has recently entered into agreement with SAIL in this regard. BCCL will supply approximately 1.67 million tonnes – out of a total coking coal production of approximately two million tonnes – to SAIL during this fiscal.

Rashtriya Ispat Nigam Ltd (RINL) or Vizag Steel which was the first to offer such a high price to BCCL will be supplied the residual available quantity. “The deal would ensure BCCL to remain in the black even after a Rs 220-crore negative impact on the bottomline due to interim relief granted in the ongoing National Coal Wage agreement.” According to Mr Bhattacharya as per the existing pricing norm, BCCL could have demanded a far steeper price of $255 a tonne – which is 15 per cent less than the existing global price of $300 - for its produce.

“However, SAIL was generous enough to not seek a price cut in 2007-08 as per the global price trends and paid at the same rate of 2006-07 to help BCCL remain in the black. Keeping that in view we have returned the gesture by offering a 40 per cent cut on the world price in 2008-09,” he added.

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