State-run Steel Authority of India today said it would form a joint venture company along with Shipping Corporation of India (SCI) for carrying out dry bulk shipping trade and importing coking coal.

The steel major and SCI each intend to hold 25 per cent of the paid-up share capital of the proposed JV, the remaining share capital would be held by other strategic partners, who are yet to be identified, the company said in a filing to the Bombay Stock Exchange.

SAIL has signed a memorandum of understanding with SCI to promote a Joint Venture Company in this regard, the steel major added.

The JV firm would primarily provide various shipping related services to SAIL for importing coking coal and may also participate in world wide dry bulk shipping trade.

In order to offer competitive rates in shipping related business and set up economically feasible coastal transportation of coal from deep draft ports, the JV company would own, operate and charter ships.

The growth plan of SAIL envisages scaling up its hot metal production capacity to over 26 million tons by 2010-11, that would call for a quantum increase in demand for imported coking coal from the present level of over 12 million tons to around 20 million tons post-expansion.

As of now, the steel major imports coking coal from Australia and US and is also planning to secure supply of various raw materials, including limestone, which is likely to be imported from Oman, the company added.