Tata Steel receives first cargo of coal from mine in Africa
New supplies of coking coal from south-east Africa are being shipped into the Tata Steel works in Scunthorpe.
The first cargo of 35,000 tonnes from the Benga mine in Mozambique comes in the wake of the Scunthorpe site and the rest of the European operation reporting long-term losses or reduced profits.
The fall over the period from October last year to June has mainly been blamed on the fact Tata Steel did not own captive raw supplies like coke for its operations in Europe.
Now company bosses feel the coke from Mozambique is the first step towards addressing the cost volatility affecting the Scunthorpe site and the rest of the business.
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The first shipment was welcomed at the weekend at the company's Immingham bulk terminal by the Scunthorpe boss Jon Bolton.
It will be followed by five to six further cargoes by the end of March 2013.
The head of Tata Steel Europe, Karl-Ulrich Koehler, said: "This is not so much of an impact on the economic side. The main benefit is stability in the sourcing of a very high quality coking coal, which will be increasingly scarce in the future."
The bright news for Scunthorpe comes five years after Tata Steel bought a 35 per cent stake in the Benga mine as part of a £44 million-plus deal.
The Riversdale project covering almost 100 square miles in south-east Africa could eventually produce 1,225 billion tonnes of coal and the field could be extended to 1,120 square miles.
Dr Koehler said: "Our difficulty is volatility and how to tackle that. It is a major problem and our European supply chain is long because we don't have our own raw materials.
"My perception of the last quarter is not as negative, but certainly it is still difficult.
"There is no short-term improvement for the market, but we are undertaking what we can to make ourselves weather-proof."
Scunthorpe MP Nic Dakin said: "Obviously it is always better if raw materials can be supplied locally. But we live in a global economy so it is right and proper that Tata are getting the best value for money for the coal that supplies the Scunthorpe works."