In the first signs of a diplomatic spat affecting trade between India and Canada, India’s largest steelmaker, JSW, has slowed down the process of buying a stake in Teck Resources.
Speaking at the FT Mining Summit in London on Thursday, Jonathan Price, the CEO of Teck Resources said: “We are still very confident in the process we have on foot here, and the news about geopolitical events between Canada and India is not something that is causing us to slow down.”
In August 2023, JSW Steel said it planned to pick up a 20–40% stake in Elk Valley Resources, a coal unit of Teck Resources.
Teck produces high-grade metallurgical coal required for steelmaking. India is heavily dependent on imports of steelmaking coal, with the country’s coal imports increasing by 30% to 162.46 million tonnes in the 2022–23 financial year. As JSW plans to double its steelmaking capacity by 2030 to 50 million tonnes, the deal with Teck is key to the company’s expansion.
Given the Canadian company is being acquired by a foreign entity, Canada’s industry ministry said it would require a national security review under the Investment Canada Act for the deal to go through.
Price added: “India is a significant growing customer for steelmaking coal, and they are also a significant buyer of metals. We would like to continue to maintain very long-standing trade relationships.”
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As part of expanding trade and investment between Canada and India, the two countries had two-way merchandise trade – international trade in which countries import and export the same or similar goods – of $10.1bn in 2019.
However, on 1 September, Canada unexpectedly paused talks on a proposed trade treaty with India, three months after an initial agreement this year.
After attending the G20 summit held in New Delhi this September, Canadian Prime Minister Justin Trudeau accused India of having a “credible link” to the killing of Sikh separatist leader Hardeep Singh Nijjar, who was shot dead in Canada in June.
While India has strongly rejected any such allegation, trade talks have been put on hold between the countries amid a diplomatic row.
Canada and India have been talking about an economic partnership agreement since 2010. On 15 September, Canada postponed its trade mission to India planned for October. On social media platform X, formerly known as Twitter, Indian Prime Minister Narendra Modi posted, “We discussed the full range of India-Canada ties across different sectors.”
Earlier in June, Glencore, one of the world’s largest coal producers, had proposed to buy the whole of Teck’s steelmaking coal business for $8bn.