India’s Tata Steel Ramps Up Coal Purchases From Australia, North America

A signboard at the Tata Steel plant in Scunthorpe, northeast England, on Oct. 17, 2015. Lindsey Parnaby/AFP/Getty Images

India’s largest steelmaker, Tata Steel, is turning to Australia and North America for its coal supplies after the company decided to stop imports from Russia.

This comes in response to the Russia-Ukraine conflict, which has forced buyers to find alternative commodity supplies such as coal, gas, wheat, and corn.

“[Our] last shipment from Russia was delivered in May,” Tata Steel CEO T.V. Narendran said, reported Nikkei Asia.

“For India, we are now importing coal largely from Australia, and for Europe, we are buying ... from the United States and Canada.”

Tata Steel previously bought approximately three million tonnes of the commodity a year from Russia. But on April 20, the company said in a statement that it had taken a “conscious decision” to stop doing business with Russia due to the Ukraine conflict.

“To ensure business continuity, all our steel manufacturing sites in India, the UK, and the Netherlands have sourced alternative supplies of raw materials to end its dependence on Russia,” the company said.

This follows a wave of tightening sanctions against Russia from the European Union that included a ban on steel as well as paper, plastics, cosmetics and wood pulp. Meanwhile, Russia’s Vladimir Putin has threatened to halt all energy imports into Europe over the West’s proposal to cap the price of gas.

“We will not supply gas, oil, coal, heating oil—we will not supply anything,” Putin said in response.

Soaring Energy Prices

Rising coal costs, soaring energy prices, and slowing demand amid surging inflation have grappled Tata Steel and other related companies.

Tata’s CEO, Narendran said while the price of its coal imports had risen, the issue of soaring prices had been raised with governments within which the company’s branches operate.

For instance, Tata asked the British government for a subsidy package to make its Port Talbot branch more “environmentally friendly” while saving thousands of jobs at the site.

“We are a global group, with operations across countries,” Narendran said, reported Nikkei Asia.

“Europe is transitioning into a greener future, and the governments are actively involved in helping the industry to transition. What we sought from the UK government is no different from what we are seeking from the Dutch government or German companies are seeking from their government,” Narendran said.

“Energy costs in the U.K. have always been higher than in Europe, even before the Ukraine war. Now it has gotten even worse. If we move into a greener future, then energy costs will go up, and we will have to wait for the government to decide [on the subsidy request].”

The company, which is currently the world’s 10th largest steel producer, aims to produce 55 million tonnes of steel annually by 2030.