Jindal to stop buying metallurgical coal from Australia in 3 months

Tags: Jindal, Industry
Jindal Steel and Power Ltd will stop buying coking coal from Australia in three months from now as its own mines there start shipping, a top company official said, a move that could further soften prices of the commodity.

Recent coking, or metallurgical, coal price settlements by major miners showed a fall in the price of all coal types for the first quarter of 2014, underscoring a weak demand outlook from steelmakers in Asia.

"We get 50,000 tonnes per month from our mine in Mozambique and another 50,000 tonnes we buy from Australia," said V.R. Sharma, deputy managing director of Jindal Steel.

"But after three months we will not be buying because we have our own mines there," he told Reuters late on Tuesday.

Jindal Steel, headed by billionaire lawmaker Naveen Jindal, got access to 650 million tonnes of coking coal resources in October after buying a majority stake in Gujarat NRE Coking Coal, the Australian unit of Gujarat NRE Coke Ltd.

Gujarat NRE Coking's two mines, located in New South Wales, are currently producing 1.5 million tonnes per year and are expected to have an output of 5 million tonnes by 2016.

Australia is the world's largest coking coal exporter, with shipments expected to rise 6 percent to 163.9 million tonnes this fiscal year ending March 31.

Sharma said Jindal Steel's coking coal consumption will more than double to 2.6 million tonnes by 2016 as it expands capacity. About 80 percent of the coal will come from its mines abroad and the rest it will buy from the open market.

But unlike other Indian companies such as Steel Authority of India Ltd and Neyveli Lignite Corp, Sharma said Jindal Steel was no longer looking to buy coal mines overseas as it has enough coking coal resources now.

India's coking coal imports are set to rise 6 percent to 35 million tonnes this fiscal year ending March 31. Domestic output has been stagnant at 18 million tonnes per year as most reserves are in thickly populated areas.

Post new comment

E-mail ID will not be published
CAPTCHA
This question is for testing whether you are a human visitor and to prevent automated spam submissions.

EDITORIAL OF THE DAY

  • Lawmakers must not dilute penalties for insurers on mis-selling

    The much delayed insurance laws (amendment) bill is back in the news and the positive statements of finance minister Arun Jaitley suggest that the gov

FC NEWSLETTER

Stay informed on our latest news!

INTERVIEWS

GV Nageswara Rao

MD & CEO, IDBI Federal Life

Timothy Moe

Goldman Sachs

Chander Mohan Sethi

CMD, Reckitt Benckiser India

COLUMNIST

Arun Nigavekar

New model for effective education

After interacting with students and teaching community on a ...

Zehra Naqvi

Being unrealistic can be good for you

Depression is a term that most people use very casually ...

INTERVIEWS

William D. Green

Chairman & CEO, Accenture