NEW DELHI - India will take steps to ensure a steady supply of coking coal for domestic steel companies, which are struggling with cargo disruptions and rocketing prices in the wake of Russia's invasion of Ukraine.
"We are discussing amongst ourselves, and we will definitely chalk out some plan on how to deal with this situation," India's Steel Minister Ram Chandra Prasad Singh told Reuters in an interview.
"We will do something to bring a sense of confidence among our (steel) producers that in this situation also, we can find some solution. There are many options. And we will discuss in detail with everybody on how to go about this."
He did not give details but he said India could approach other producers and could look at boosting local supplies and importing pulverized coke injection (PCI) as a substitute.
India's demand for coking coal, used in steelmaking, is growing at a faster clip, and the country imports the bulk of its requirements from Australia.
India's overall coking coal imports total 50-55 million tonnes, with overseas purchases rising 4% annually.
To reduce its import dependence on Australia, India last year agreed with Russia to import coking coal, which accounts for about 40% of the total cost of steel production.
"We will see how it works out," Singh said referring to India's pact with Russia to buy coking coal.
A spike in the price of coking coal is a big worry, Singh said.
"The major concern is the price that has gone up very high," he said.
As concerns increase over supply shortages from leading producer Russia, coking coal prices touched $600 a tonne from $150 tonne in January this year.
Russia accounts for about 30% of the coking coal requirements of the European Union, Japan and South Korea. With western sanctions on Russia and its ejection from the SWIFT payment system, coking coal supplies from Russia have been hit, triggering a spike in the price.
Indicating a push for government-backed infrastructure projects, Singh said Indian companies would produce a record 118 million tonnes of steel in the current fiscal year to March.
"Our requirement is immense, and we need a lot of steel for housing projects, for infrastructure projects," he said, downplaying fears of a slowdown in domestic demand.
Asked about Indian steel companies' push for exports, Singh said: "First we have to see that our domestic requirement is met."
(Reporting by Neha Arora and Mayank Bhardwaj, Editing by Louise Heavens)