India: SAIL invites EoI for long-term coking coal supply

Steel Authority of India Limited (SAIL), the country's largest steel producer, has floated a global tender inviting expression of interest (EoI) for supply of coking coal and PCI on a long-term agreement.

The tender has been put in place to broaden the supplier base as the company plans to expand hot metal production to 50 million tonnes (mn t) annually which would entail a substantial increase in coal requirement.

Eligibility

Overseas coking coal/PCI coal producers owning, managing and controlling the mines are eligible to take part in the bidding process. Besides, coal suppliers having marketing rights from such mines are also eligible for participation.

In case the coal offered for supply is of Chinese origin, the bidder would be required to submit an undertaking or Letter of Authority sanctioned by the Government of China in order to export coal from the country.

An essential component of the eligibility criteria is that the coal producer/supplier should have exported a minimum 300,000 tonnes (t) of coking coal in each of the last three financial years. The minimum quantity in case of PCI is 100,000 t that should have been exported in each of the last two financial years.

The financial aspects of the tender demand that the bidder should have a minimum turnover of $ 100 million in case the offered material is hard/soft coking coal and $ 50 million in case the offered coal is PCI.

Coal Specification

For Coking coal

For PCI Coal

Delivery terms

The bidders interested in entering into long-term supply contracts are required to offer at least 300,000 t of coking coal on a yearly basis for a minimum of three years. In case of PCI coal, the minimum quantity for offer is 75,000 t annually.

Initially, free representative custom cleared sample of the coal offered would be evaluated for pilot oven and laboratory characterisation tests. Thereafter, SAIL, at its discretion, would take a trial shipment preferably in a Panamax/Handymax shipload upon successful passing of the tests.

Finally, after successful completion of the supplies within the stipulated period, the bidder may be eligible for entering into a long-term agreement with SAIL.

The price of the trial shipment and supply of the balance quantity would be determined through negotiations keeping in view the market conditions.