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Friday, December 2, 2011

Steel ministry sets up coking coal procurement panel

Friday, 02 Dec 2011

ET reported that steel ministry has set up a committee to look into the need for rationalising the procedure followed by steel PSUs for procurement of coking coal.

Mr Beni Prasad Verma steel minister said that "A committee has recently been constituted in the ministry for looking into the need for rationalising the procurement procedure for coking coal, acquisition of mines abroad and optimising the use of coking coal by steel PSUs.”

Replying to a question on whether the government was aware that during the last two years, SAIL and RINL have made purchases of coking coal at a time when the price was very high in international markets, he said this was a commercial decision of the companies.

The minister said that "This (procurement) is done as per their requirements under a laid down policy through long term agreement. As per international market practice, quantities under LTA are settled annually by the empowered joint committee which comprises representatives of both Steel Authority of India and Rashtriya Ispat Nigam.

"While negotiating quantities and prices with long-term suppliers, EJC takes the FOB (free-on-board) prices settled by Japanese steel mills and others as reported in the international journals as the benchmark.”

The minister added that "The annual requirement is tied up at the beginning of the year and the same is confirmed and received quarter-wise throughout the year.”

Mr Verma said prices of imported coking coal were up by 75 per cent in 2010-11 vis-a-vis the previous fiscal, affecting the profit margins of steel-makers.

(Sourced from ET)

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