Sail Rejects Cil Coking Coal Price Hike

Reacting to the cash and carry system recently introduced by Bharat Coking Coal Ltd (BCCL), a CIL subsidiary, for the supply of coking coal to its plants, SAIL sources said the washed coal prices for BCCL washeries had all along been settled through mutual negotiations between SAIL and BCCL on a year-to-year basis.

For the current financial year, however, BCCL unilaterally fixed a price of Rs 1,685 per tonne ignoring the past practice of negotiated settlement.

On the other hand, the ash content in coal was also increased, the sources said. Stating that in view of the monopolistic position of the coal company, SAIL accepted the price but insisted that there should be no compromise on quality.

 

However, the ash content analysed at the steel plant end was higher by 2 to 3 per cent compared with BCCL analysis at the loading point.

The sources further said that BCCL did not pay heed to SAILs demand for supply of quality coking coal and unilaterally withdrew its representative from the steel plants.

SAIL also insisted that till such time a dependable system of correct sampling and analysis was made at all washeries, the prevalent system of averaging of analysis both at the despatching end and destination should continue for releasing the payment.

SAIL sources said that it was decided at a secretary-level meeting in June last that the price of coal should be related to the quality of coal with bonus/penalty clause and a long-term contract should be made between SAIL and CIL.

The coal company also assured quality assessment facilities at the loading end to SAILs satisfaction. The sources said that repeated requests by SAIL to BCCL for entering into a long-term contract with clear terms and conditions to avoid disputes had no impact.

Although SAIL made payments within three days of submission of bills, BCCL unilaterally stopped loading of washed coal for SAIL plants from October 15, the sources said.

BCCL, however, resumed supply next day after sail paid Rs 12 crore as advance towards supply.

SAIL steel plants consumed about 16 million tonne of coking coal per year of which 6.5 mt were imported. BCCL supplied 4.8 mt. While another 4.7mt was supplied by other subsidiaries of CIL.