Sajjan Jindal-led JSW Steel is planning to source coking coal from Russia at a competitive price as shipments from Australia are rising steadily.

The steel company will avoid using dollar to settle the deal with Russian coal companies and use other currencies such as euro or dirham to avoid conflict arising from the economic sanctions imposed by the US, said sources.

Coking coal prices in Australia has been increasing steadily despite the global recession particularly after China lifted the unofficial ban on sourcing from Australia imposed in 2020.

However, China started buying coking coal from Australia with the first shipment of 1.4 million tonne of coal loaded in 14 ships in January, he said.

Plans for new plant

JSW Steel has drawn plans to invest ₹2,000 crore to develop a virgin coking coal mine in Jharkhand. The company was declared the highest bidder for the coking coal mine put on auction recently and is waiting for an official communication from the government.

JSW Steel expects the new mine to become operational in 2-3 years. The mine has reserves of about one billion tonne, similar to the company’s Moitra coking coal mine located in the same State.

Seshagiri Rao, Joint Managing Director, JSW Steel earlier told businessline that the company will blend 20-30 per cent of domestic coal with high quality coal to bring down the overall cost.

“We will get about one million tonne of clean coal after both the mines come into operation in 2-3 years and this accounts for 6-7 per cent of our annual requirement,” he added.

The company intends to achieve 25-50 per cent backward integration in coking coal. JSW Steel is not completely relying on coking coal integration considering sustainability of supply and price issues due to the ESG factor.

At the current capacity, the company requires 18 mt of coking coal per annum. To achieve 25 per cent of integration, the company requires about 4.5 mt of captive coking coal supply but that kind of asset is not available in India. The company is exploring coking coal assets globally, said Rao. The long-term sustainable coking coal price is about $150-170 a tonne.