Tata Steel bought 75,000 tonnes of coal from Russia in May 2022. Why?

Tata Steel imported about 75,000 tonnes of coal from Russia in the second half of May 2022, a month after announcing that it won’t do business with the country.

According to a Reuters report, the coal was imported in a vessel named Panamax Ostria. The government source confirmed to the news agency that Tata Steel had imported 75,000 tonnes of coal from Russia in May, but did not give more details.

The company had said in April that all its manufacturing sites in India, the UK and the Netherlands had sourced alternative supplies of raw materials to end its dependence on Russia.

Tata Steel was the only major steelmaker in India to announce it would stop doing business with Russia. Other Indian steelmakers have been importing bulk quantities of coal from Russia.

WHY INDIAN COMPANIES ARE BUYING COAL FROM RUSSIA

The main reason Indian companies have been buying coal from Russia is that they are getting the supply at heavily discounted prices and that there has been a shortage of coal in the country.

Purchase of Russian coal by Indian companies has increased further in the last few weeks as western countries have imposed sanctions on Moscow. Coal traders have offered discounts up to 30%.

Cheap coal supply is crucial for Indian steelmakers, especially now after the export duties were imposed by the Indian government.

Not only coal, India has been buying oil from Russia in much more quantity recently because of the discounted prices.

TATA STEEL'S RESPONSE

A spokesman for Tata Steel said the deal to import coal from Russia was made before the company's announcement to cut business ties with Russia.

'There has been no other PCI coal purchase by Tata Steel from Russia after the announcement,' the spokesman said in an emailed statement to Reuters.

COAL CRISIS IN INDIA

As the heatwave situation worsened in India in the month of May, there were severe power outages in the country due to shortage of coal supply. The coal crisis is expected to get worse in the next quarter (July-September), the power ministry has said.

India expects domestic coal supply of 154.7 million tonnes, 42.5 million tonnes short of the projected requirement of 197.3 million tonnes in the September quarter.