India Looks To Australian Coking Coal For Steel Production And Power Generation
On its journey of self-reliance, India still needs coal.
Highly dependent on imports for this crucial raw material needed for steel and power generation, India has decided to tackle its coking coal deficit by acquiring a foreign coking coal asset, and washing certain grades of coal to make it fuel-ready.
Power Minister Piyush Goyal told news agency Press Trust of India that one of the ways the government was contemplating reducing its reliance on imports was to wash certain grades of coal to make available 20 million metric tons of coking coal in the next three to four years for the domestic steel industry.
Not Enough Coal for Steel Production or Power Generation
Chairman and Managing Director of Coal India Ltd. (OTC:CLNDY) (“CIL”) S. Bhattacharya has reiterated that coking coal requirements for the domestic steel industry are still not being met. State-run CIL, the country’s near-monopoly coal producer, is said to be looking at coking coal assets overseas as the country is faced with constraints of commercially viable domestic metallurgical coal reserves, the Minister told Parliament in a statement. CIL is looking to appoint a merchant banker to assist it in acquiring assets overseas.
According to some media reports, CIL is considering buying coal assets in Australia for over $1 billion. The state-run company is likely to raise debt to fund the said assets in Australia. CIL is also reportedly mulling entering into strategic partnerships in the next financial year 2017-18 to import some coking coal.