- The activities involved in the MoU are aimed at diversifying source of coking coal, said a statement
- The MoU between India and Russia shall benefit the entire steel sector by reducing their input cost, the statement said
New Delhi: The Cabinet has approved a Memorandum of Understanding (MoU) on Wednesday between India and Russia for cooperation on coking coal, which is a key raw material used for making steel. The MoU is important because domestic steel industries in India are dependent on imports, mainly from Australia, for meeting their coking coal requirements. Around 85 percent of India’s domestic requirement for coking coal is met through imports.
India imports about 56 million tonnes (MT) of coking coal per annum worth around Rs 72,000 crore. Around 45 MT comes from Australia alone, and the remaining is sourced from South Africa, Canada and the US, according to official data. “The Cabinet, chaired by Prime Minister Narendra Modi, approved the MoU (memorandum of understanding) between the Ministry of Steel of the Republic of India and the Ministry of Energy of the Russian Federation on cooperation regarding coking coal,” said an official statement.
MoU aimed at diversifying sources of coking coal
“The objectives of the MoU is to strengthen cooperation between Govt. of India and Govt of Russia in the steel sector. The activities involved in the cooperation are aimed at diversifying source of coking coal,” said the statement. Since Russia is closer to India, sourcing coking coal from the country will also be cheaper for India and will reduce per tonne cost of steel production. “The MoU shall benefit the entire steel sector by reducing their input cost. This may lead to reduction in cost of steel in the country and promote equity and inclusiveness,” said the statement.
“The MoU will provide an institutional mechanism for co-operation in the coking coal sector between India and Russia,” the statement added.
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