India needs high quality thermal or steam coal for power generation as well as coking or metallurgical coal to fire steel furnaces. Imported coal is usually blended with local coal. The country does currently import coal from the US and Canada, but their share in total exports is very small.

 

Officials said Canada had offered mines and supplies way back in 2014 and India has since been in talks with the Canadians and has been studying various offers.

 

At last month's meeting between Prime Minister Narendra Modi and US President Donald Trump, the Americans offered "clean coal", which basically means washed coal (which is less polluting). Indian officials have been asked to look at this offer by holding talks with their US counterparts.

 

Officials said steel minister Birender Singh along with SAIL India chairman P.K. Singh will be travelling to Canada to hold talks to secure supplies from Canada Teck Resources.

 

This follows disruption at Australian mines following cyclone Debbie in April. However, officials said the move to hold talks with Canada and to explore possible imports from the US and South Africa had to do with India's desire to secure its energy and not "be dependant on one single geography for major supplies".

 

The disruption caused by Debbie to Australian supplies had seen China and Japan temporarily importing more US coal. However, by June, Australian exports had come back to near normal. Australian trade statistics show exports jumped 9 per cent in May, which lifted the monthly trade surplus to $2.47 billion, up from $90 million in April after the cyclone hit northeast Australia, closing rail and coal ports in the region. A $2.42-billion surplus was recorded in March.

 

SAIL alone imports around 12 million tonnes (mt) of coking coal. Of this, 9-10 million tonnes come from BHP Billiton of Australia. India imports about 50 million tonnes of coking coal every year.

 

Sources said SAIL also imports from Indonesia and in smaller quantities from the US. A greater diversification is necessary to ensure that the steel maker is not too dependent on Australian mines.

 

Indian firms also source supplies from Mozambique, Columbia and Russia.

 

Officials said the government has also asked SAIL, the lead promoter of ICVL - a joint venture among several state-run firms tasked to buy coal resources abroad - to review its style of working and get "it to more vigorously scout and possibly buy energy assets abroad" .

 

"It was tasked to ensure that it could supply imported thermal or met coal to the tune of at least 10 per cent of the 2019-20 requirements of SAIL and RINL, that is about 5 million tonnes per annum, from assets overseas in the medium term towards ensuring security of supply. It has yet to live up to its promise," said officials.

 

Since inception, ICVL has managed to acquire Rio Tinto mines in Mozambique, which have an annual yield of 5mt, which could be increased over time to 12 mt.

 

Officials said the government as well as ICVL would be looking at other mines which may come up for sale, mostly in Africa. "We need to secure our own mines. We cannot keep importing and we do not have sufficient quality reserves in India," they said.

 

SAIL is seriously looking at importing coal from South Africa. "It is a key potential supply source," said officials.

 

Energy co-operation with the US has now been flagged at the highest level but the problem with supplies from the US besides cost of transportation is protracted negotiations.

 

GAIL has a long-term gas supply contract with Cheniere of the US, which was signed six years back for a deal valued at an estimated $22 billion.