Jindal looks at SAfrican coal to replace Chinese

London, Apr 4: India's Jindal Steel and Power Ltd. which owns the world's largest coal-based sponge iron plant at Raigarh in Chhattisgarh state, is making quiet enquiries for South African coal to replace all or part of the 500,000 tonnes of Chinese coal which it bought last year, industry sources said.

The lack of Chinese coal available to the Indian market and soaring Chinese FOB prices have prompted Jindal to look at alternative coal supplies, the sources said.

No formal tender or enquiry has been issued, they said.

Jindal's 500,000 tonnes of Chinese was delivered between April 06-March 07 and the sponge iron maker is understood to be looking for deliveries of alternative coal origins to begin very soon, the sources said.

Jindal's Corex plant uses South African coal with vols of 25-30 percent. The company prefers fairly low-ash material with a high fixed carbon content.

The bulk of Jindal's 2 million tonnes coal imports in 2006 was Australian, producer sources said.

Australian coal has a higher calorific value than South African and is sized, that is screened to remove fine powder leaving uniformly sized lumps, which makes it the ideal coal origin, they said.

Jindal may replace some of the material usually bought from China with more Australian but, market sources said, the long queues at Australian ports and potential for costly demurrage may encourage Jindal to keep its Australian imports unchanged.

Indian trading companies on Tuesday were actively seeking June and July loading South African cargoes of coal with a high level of vols for South African and the highest possible fixed carbon content. These cargoes are likely to be intended for offer to Jindal, market sources said.

Reuters