India snaps up cheap Australian coal sitting at Chinese ports as stockpiles plunge

China is battling a crippling energy crunch that’s set to get worse as winter sets in, yet it will not touch coal from Australia due to diplomatic tensions

Indian firms have bought nearly 2 million tons of Australian thermal coal, sources said, as supplies at power plants near their lowest in four years

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Workers unload imported coal at a port in Jiangsu province, China. File photo: Reuters

Published: 11:37pm, 1 Oct 2021Updated: 11:30am, 2 Oct 2021

India is buying Australian coal that has been stranded inside China for months, according to people who have made the purchases, spotlighting how geopolitics is complicating Beijing’s battle against an energy supply crisis.

The fuel is being bought at a US$12-$15 a ton discount to fresh shipments from Australia and is some of the cheapest thermal coal relative to its quality on the market, said the sources, who asked not to be identified because they were not authorised to speak with the press.

Indian cement makers and sponge iron plants are among buyers that are using the supplies to bridge domestic shortfalls.

People walk under a freight wagon laden with coal in Jharkhand, India. File photo: Bloomberg

The development reflects the extent to which China-Australia relations have soured: China is battling a crippling energy crunch that is set to get worse as winter sets in, and yet it will not touch coal from Australia due to a geopolitical squabble.

Indian firms have bought nearly 2 million tons of Australian thermal coal that has been sitting in warehouses at the Chinese ports, the people said.