ArcelorMittal on coal, coke acquisitions and more

18 October 2011

Sushil Sajnani, Sourcing Manager Coal, ArcelorMittal USA will be participating in the Manager's Meeting and Forum: An open discussion of more specific, day-to-day issues affecting the metallurgical coke, coal and steel sectors. He'll be joined by Terry Hale, Patriot Coal (Market trends and developments) and Douglas Fagundes Moreira, New Projects for Procurement & Logistics Dept. / Solid Fuels, GERDAU, Brazil. This will be one of the must-attend sessions of the Met Coke World Summit 2011! Don't miss it!

Sushil shared some insights into procurement of coke/coal with us leading into this year's conference:

Where are you procuring coke / coal? In the US, abroad, or both?
As the world's leading steel and mining company, we have a presence in 60 countries and purchase coal from all continents. In the U.S., where I am focused, we primarily rely on coal from the USA and Canada. Globally, ArcelorMittal is taking steps to increase its sustainability in raw materials through vertical integration. This includes plans to expand our coal assets.

How complicated are your coal / coke acquisition activities? Is managing acquisition difficult with a rapidly changing market conditions?
ArcelorMittal has a complex coal supply chain. We have operations with differing transportation options for raw materials based on geography and source. Due to these vast geographies, vast variations in demand and also due to the different needs of each operation, the coal needs are very unique. Thus coal acquisition is only expected to be a complex process.

As a company which has been created through the inorganic route of M and A's, we are familiar with the rapidly changing situations of the coal market on account of acquisitions and view it as inevitable.

How would you describe ArcelorMittal's North American production of steel and demand for raw materials?
The recovery of the steel market has been slow and progressive, as expected. We continue to produce steel in line with customer demand.

What are some of your biggest challenges with coke and coal procurement?
One of our big challenges is to be able to arrive at a fair market price for a particular coal since each coal is unique. This can be especially challenging when dealing with multi-year contracts. It is very difficult to predict market movements in advance as markets are very sensitive to geological and weather related changes. Other challenges can include transportation logistics, geography and acts of God which cannot be anticipated far in advance or controlled.

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