The Indian government has shelved the proposed project to create a common platform of domestic steel companies to jointly import coking coal, government sources said on Thursday, August 8.
The sources said that the project has been abandoned as no mechanism could be found to reconcile the differing grades of coking coal required by the different steel mills.
The aim of the common platform was to import coking coal as a consortium of local steel companies for better leverage in price negotiations with overseas suppliers.
However, the different grades of coking coal required by the various steel mills would have resulted in the fragmentation of import volumes requiring multiple suppliers and thereby defeating the goal of achieving leverage on sellers, the sources said.
Indian steel mills need to import about 85 percent of the industry’s requirement of coking coal, with annual import volumes estimated at around 70 million mt.