Jindal Steel and Power Limited (JSPL) has resumed commercial operations of its coal mine in Mozambique from 1Oct’16, to off-set the impact of rising Coking Coal prices on steel production.
JSPL Minerale Mozambique LDA, its subsidiary in Mozambique, restarted mining operations at its Chirodzi Mines in Tete Province of Mozambique. The mine was acquired in 2011, and mining operations were put on hold in view of falling Coking Coal prices.
But, the recent abrupt rise in Coking Coal prices has taken a toll on the profitability of steel makers. Of late, spot prices of Coking Coal have hovered at rates more than USD 200/MT, driven by supply tightness in Australia and China. As a matter of fact, Coking Coal price accounts for one-fifth in the total cost of steel making.
To lower the impact of the rising prices of the coal variant, JSPL has planned to use its own Coking Coal resources. The coal mine bears an extractable reserve of around 450 MnT, out of which 112.5 MnT is Coking Coal.
India is deficit in Coking Coal reserves; the country’s demand is met through imports from Australia, Canada and Africa.
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