India in talks with Canadian firm to buy coking coal

The government is in talks with Canada’s Teck Resources, the largest North American producer of coking coal used to make steel, for long-term purchase agreements after a cyclonic disruption in Australia cut supplies earlier this year.

India has joined top buyers China and Japan to scour new markets after a powerful cyclone hit Australia that knocked out rail lines carrying coking coal to ports for export, causing a surge in prices.

Steel Minister Chaudhary Birender Singh will be in Canada on Sunday along with executives of Steel Authority of India Ltd (SAIL) for talks with Vancouver-based Teck over long-term, formula-based price deals, a top official in the steel ministry said, declining to be identified as the talks have not been made public.

“Coking coal prices went haywire because of the natural calamity in Australia. There is every reason for India to not depend on only one source for coking coal,” the official said, adding the Canadian government had called upon the the minister to visit the country’s mines. SAIL and Teck may explore signing a preliminary agreement, the official said.

At present, SAIL meets a little over three-fourths of its needs from BHP Billiton,, the world’s biggest shipper of coking coal, according to a second government official. India needs about 56 million to 57 million tonnes of coking coal every year, of which about 85 per cent is imported. According to the government’s newly-drafted National Steel Policy, India’s coking coal requirements will more than double by the financial year ending in 2031.