Russia to help India tackle coal shortage

India and Russia have signed a memorandum of understanding (MoU) to collaborate in mining and steel sector.

Key facts

• MoU was signed between Union Minister of Steel, Ram Chandra Prasad and Russia’s minister of energy Nikolay Shulginov.
• The MoU specially focuses on coking
• Signing of the deal is part of India’s National Steel Policy 2017.
• Under National Steel Policy 2017, India aims to reach 300 million tonne steel production by 2030. It is also working on forward and backward integration.

About the MoU

The MoU between both the countries was singed in Moscow. It envisages on the implementation of commercial activities and joint projects in coking coal. Commercial activities include:

1. Long-term supplies of high-quality coking coal to India
2. Development of coking coal deposits as well as logistics
3. Sharing of experience in technologies of mining & coking coal production management, Beneficiation, processing and training.

Discussion of OVL with Russia

ONGC Videsh Ltd (OVL) is also discussing to buy a stake in Russia’s planned liquefied gas project Arctic LNG-2 and massive Vostok oil project. In the year 2018, Ruias-owned Essar Oil sold India assets to Russian government owned Roseneft-led consortium for $12.9 billion.

Significance of the MoU

MoU is significant as it was signed at a time when India’s non-power industries like cement, aluminium and secondary producers of steel are facing severe thermal coal shortage.

India’s coal import

Presently, India imports its coking coal from Australia, which places the domestic steel industry at the receiving end with respect to pricing power. Almost all the primary producers of steel in India rely on imported coking coal for meeting their supplies.

Coal reserve in India

India has large coking coal reserves in Jharia district of Jharkhand. But the region continuously suffers from fire as a result, it remains unexplored for mining. Jharia region is estimated to have coking coal reserves of around 19.4 billion tonnes.

Month: Current Affairs - October, 2021