Coal news and updates

Jindal Steel expects to meet met coal needs via captive mines

The acquisition of a majority shareholding in miner Gujarat NRE Coking Coal will help India's Jindal Steel & Power Ltd. meet its coking coal requirements almost entirely from captive sources, a New Delhi-based JSPL official told Platts Tuesday.

Gujarat NRE Coking Coal is the Australian subsidiary of India's largest independent producer of met coke -- Gujarat NRE Coke Ltd. or GNCL -- and is listed on the ASX.

JSPL, which has now acquired 52% share in the Australian company, requires coking coal to feed its 3 million mt/year integrated steelworks at Raigarh in the central-eastern Indian state of Chhattisgarh.

JSPL's requirement totals about 1.3 million-1.4 million mt/year of coking coal for about 2 million mt/year of hot metal production via the blast furnace route at Raigarh, the official said.

Of this, JSPL presently secures about 500,000 mt/year (about 40,000 mt/month) from its captive mining operations in Mozambique, and the balance from Australian miners including some 500,000 mt/year from Gujarat NRE Coking Coal's mines.

JSPL also expects its coking coal requirements in India to rise to about 2.5 million mt/year after end 2015 by when it expects to have commissioned a 2.5 million mt/year blast furnace at the steelworks it is building at Angul in the eastern state of Odisha, the official said.

Gujarat NRE Coking Coal produces hard and semi-soft coking coal from two mines in the Illawarra region of the eastern Australian state of New South Wales.

It sold 288,000 mt of coking coal in the April-June quarter and plans to expand production capacity to 6 million mt/year by 2016.

Earlier this month, the Australian miner said it was finalizing financing arrangements with the infusion of about A$66 million in new capital through a share sale to JSPL.

Gujarat NRE Coking Coal Executive Chairman Arun Kumar Jagatramka said JSPL's investment would allow the company to "execute on its plans in a difficult market for coal companies and also a weak equity capital market."

The Indian steelmaker initially held 19.5% in Gujarat NRE Coking Coal and lifted this to 31.5% in March and now to 52% following the share sale. The two companies also plan to enter separately into new off-take agreements for the supply of coking coal to JSPL.

Source: Platts