The 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, Parliament was informed today.
“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,” Steel Minister Beni Prasad Verma said in the Rajya Sabha.
“This (procurement) is done as per their requirements under a laid-down
policy through long-term agreement (LTA). As per international market practice,
quantities under LTA are settled annually by the empowered joint committee
(EJC), 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
said.
“The annual requirement is tied up at the beginning of the year and the
same is confirmed and received quarter-wise throughout the year,” he
added.
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.
Source: The Economic Times
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