New Delhi: “State-owned steel giants Steel Authority of India Ltd.(SAIL) and Rashtriya Ispat Nigam Limited (RINL) have negotiated the current fiscal’s long-term coking coal prices with global suppliers at $115-125 per tonne, which is over 60% lower than what the companies had paid in the last financial year,” an official said.

“A committee, supposed to negotiate the coking coal prices with global suppliers, has finalised the rates at $115-125 a tonne for the two companies ,” steel secretary P.K.Rastogi said.

“The new contract would be effective from 11 April this year instead of 1 July,” Rastogi said, adding that the differential price for three months (April-June) of 2008-09 contract would be carried forward over a span of few years.

In 2008-09 (July-June), the steel majors had settled their long-term contracts for coking coal, a vital raw material for steel-making, at $292-300 a tonne, which heavily added to their input costs.

The country’s largest steel maker, SAIL, alone incurred an expenditure of about Rs6,000 crore on the import of about 10.5 million tonnes of coking coal in the last fiscal.

In the current financial year, Navratna PSU SAIL is likely to import 11 million tonnes of coking coal while RINL over three million tonnes.

As the new coking coal contract has been settled at a cheaper rate, it is expected to ease out the input cost pressure on the two steel companies.

The negotiation of coking coal prices between Indian steel mills and global suppliers for the 2009-10 fiscal was on the basis of the benchmark $129 per tonne settled by global miners recently with Japanese steel companies.