Tata Steel Ltd., one of the major importers of Russian coal in recent months, has decided to stop procurement from the country citing "uncertainties" over supplies following international sanctions imposed on it after Ukraine invasion.
“To ensure business continuity, we have sourced alternative supplies of raw materials, as transactions with Russian suppliers and bankers at present come with a lot of uncertainties as a result of international sanctions imposed on Russia," a Tata Steel spokesperson said in a statement.
Though companies from India, like their counterparts in many western countries, are still procuring crude oil and coal at discounted prices from Russia to meet their requirements, payments to Russian suppliers through the prevailing banking channels remain a concern owing to the economic sanctions.
Even though there has been no ban on coal imports from Russia, Tata Steel is believed to have taken the decision to sustain its operations through reliable supplies from overseas at a time when shortage of coal is threatening to disrupt energy generation in India.
"We believe that impact will not be there as the company has a very diversified procurement mechanism with supplies coming from Mozambique to Australia. Increased supplies from US and other markets are likely to make up for the shortfall, if any," said Kamlesh Bagmar, deputy head of research at Prabhudas Lilladher.
Tata Steel stock on Monday gained 1.84% to ₹1,295.10 a share on the BSE on a day when the Sensex slid 0.15%.