Mr Kees Gerretse group director of procurement of TATA Steel told Reuters good quality coking coal supply will remain scarce in the next few years and will support steel prices.

Mr Gerretse on the sidelines of a conference said that "If you are looking to steel consumption and production and coking coal assets, coking coal in the long term will go up; to what level it would be hard to predict.”

Mr Gerretse said that "Lower coal grades are good enough but they affect the production process.”

He added that "In today's market, where you don't have the full utilization of assets you can use lower coking coals."

Mr Gerretse said that "Iron ore is not scarce; there is a lot of it in Africa. It is just about how quickly we can develop the assets linked to the growth of production in China. In the short term there is some tightness but in the next five years the situation will be better.”

He added that "It is all about people daring to invest in African countries underlining that political risk and logistics are the major difficulties for miners in the continent.”

Prices of hard coking coal a key steelmaking ingredient are about USD 300 a tonne from about USD 200 a tonne a year ago, because of logistical bottlenecks and tighter supply due to flooding which hit top producer Australia earlier this year.

(Sourced from Reuters)