ArcelorMittal Nippon has filed a lawsuit against the Indian government over retroactive import restrictions on metallurgical coke, claiming it could severely affect its operations and finances. The restrictions, aimed at benefiting domestic suppliers, have raised quality concerns and sparked legal action by both ArcelorMittal and rival JSW Steel. The outcome could have significant implications for India’s steel market and trade policies.
ArcelorMittal’s joint venture in India has initiated legal action against the Indian government, alleging improper retroactive imposition of import restrictions on a key steelmaking raw material. These curbs, effective from January, restricted imports of low-ash metallurgical coke (met coke) through country-specific quotas aimed at enhancing local suppliers’ competitiveness. This policy shift has raised concerns among major industry players like ArcelorMittal Nippon Steel India regarding local met coke quality.
The company’s lawsuit, filed on March 5 at the Delhi High Court, challenges the rejection of import requests for 168,300 metric tonnes of met coke from Indonesia and Poland, which were placed before the new restrictions. The Indian government argued that ArcelorMittal Nippon had sufficient met coke supplies, but the company maintains that this decision contradicts free trade principles by retroactively changing import policies.
The 290-page court filing emphasizes that such actions could undermine investor confidence and create uncertainty in trade conditions. Amid this conflict, India’s Steel Secretary stated that adequate domestic met coke is available, asserting that companies prefer imports due to significantly lower costs. In addition, bigger competitor JSW Steel has also filed a complaint against the Indian government over delays in importing met coke.
ArcelorMittal Nippon’s court filing asserts that the policy change endangers its production capabilities, potentially leading to significant financial losses, including $25 million for each halted consignment and daily vessel detention charges. Additionally, a confidential letter from February alerted the government about potential operational shutdowns due to these curbs, threatening production levels from April onward. Currently, ArcelorMittal Nippon holds a 5% stake in India’s steel market, which boasts an annual capacity of 200 million metric tons.
The legal dispute highlights significant tensions between ArcelorMittal Nippon and the Indian government regarding import restrictions that are perceived to violate free trade principles. With potential financial implications and production risks at stake, the outcome of this case may shape the future of steelmaking operations in India. Companies in the sector are increasingly concerned about ensuring stable and predictable trade conditions.
Original Source: money.usnews.com
