india: Russia’s largest coal company in talks to set up India office

Russia’s largest coal supplier, Siberian Coal Energy Company (SUEK), is in talks to open an office in India, with the country emerging as a top export destination following sanctions imposed by Europe on Russia, said its CEO Maxim Basov.

Basov told ET in an exclusive interview that the company’s shipments to India, traditionally a smaller importer of Russian coal, increased to 1.25 million tonnes in the first six months of 2022, twice more than in the entire 2021.

SUEK, the world’s fourth largest coal supplier, can increase coal supplies to India up to 10 million tonnes a year if all logistical challenges are addressed, said Basov, who recently visited the country for talks to launch the India office.

“SUEK is interested in enhancing links with India. Therefore, it is currently solving pivotal challenges of building up supplies – logistics options, assessing demand, widening the range of partners, determining the cost-effectiveness of supplies, etc.,” said Basov.

Historically, India was not one of the priority markets for Russian coal suppliers, as costly logistics were an obstacle, said Basov. “With the introduction of anti-Russian sanctions by the EU, interest in this area has picked up and shipments are building up quite rapidly,” he said. “In some months, we registered an increase of 50% or more year-on-year. Whereas Russia used to supply 5-7 million tonnes of coal per year, now it supplies about 2 million tonnes per month.”

SUEK, which produces ecologically friendly coal, will also explore investments in Indian energy projects in the future, besides inviting Indian foreign direct investment in its projects in Siberia. After the opening of the Indian office, the company will be working with many partners in both the energy and metallurgy sectors, and will look to start investing in Indian coal or energy projects.

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The company is eyeing a long-term association with India through the use of the International North South Transport Corridor (INSTC) and Vladivostok port. Prime Minister Narendra Modi had pitched for optimum use of this port in his recent speech at the Eastern Economic Forum at Vladivostok.

“As for the quality of our coals, it can be regarded as a benchmark. SUEK supplies were traditionally focused on the European and Japanese markets, where the most stringent environmental requirements are in place – both in terms of ash content and sulphur content. Practically all of the coal SUEK exports goes through enrichment plants and has undergone a multistage quality monitoring system,” said Basov. “I can say with confidence that our coal is one of the cleanest in the world in terms of its environmental impact… our portfolio includes coal of various grades, which arouses great interest from Indian partners.”

Basov is no stranger to India, having studied in an Indian school in Moscow, besides visiting India numerous times in the past, including for the study of Advaita in an Indian monastery.

Asked about the payment mechanism for India’s coal imports from Russia, he said, “Our company currently operates in US dollars, but payment in other currencies is also a possibility for us, especially since it has already become a common practice for Russian companies. In the Indian coal market, almost half of the transactions with Russian suppliers are made in currencies of third countries – yuan, dirhams, Hong Kong dollars and others.”

Basov said the financial systems of the two countries are ready for such transactions since there is an intergovernmental agreement in place. “For this reason, we do not see any particular problem in making payments for coal supplies,” he said.

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