On August 9, Indian state-run steel producer Steel Authority of India Limited’s (SAIL) chairman C. S. Verma expressed his concerns about rising raw material prices which he said threaten the country’s steel sector, in an interview given to Indian newspaper Indian Express. He also stated that SAIL plans to negotiate with countries which have minerals.
Commenting on coking coal prices, C. S. Verma said, “In April 2010 coking coal prices were hovering around $120/mt, and today it is nearly $300/mt. Global coking coal producers had declared force majeure recently owing to floods in their mines and have not withdrawn it despite the situation nearing normalcy. These producers are taking steel makers for a ride and are collectively bargaining for pricing of this grade of the fuel.”
The SAIL chairman also stated that the company plans to secure raw material assets through government-to-government negotiations. Accordingly, SAIL will build two steel plants of 3 million mt capacity each in Indonesia and Mongolia for which the company’s budget is Rs 240 billion ($5.3 billion). Mr. Verma, indicating that Afghanistan is the country of the future, said that SAIL could consider setting up a plant there if the Afghan government gives raw material and land on a nomination basis along with security. A SAIL-led consortium will submit a bid for the Hajigak iron ore mines by September 4. Mr. Verma added that SAIL is also trying to negotiate with the US, Australia, Mozambique and Colombia for mineral assets.