How an Indian cement producer bought Russian coal for yuan

Reuters special report

An Indian cement producer’s recent yuan purchase of Russian coal involved India’s largest private lender, HDFC Bank, according to an account seen by Reuters and a source, which could ease Western sanctions against Moscow.


   A Russian ruble banknote is featured on a Chinese yuan banknote in this illustration taken May 30, 2022. REUTERS/Dado Ruvic

There is no suggestion that the purchase, the details of which have not been previously disclosed, in any way violates the sanctions imposed on Russia after its NWO in Ukraine.

But the document shows one way Russia could continue to sell goods abroad without settling in US dollars, despite restrictions aimed at ousting it from financial markets.

HDFC Bank backed cement maker Ultratech’s purchase of Russian coal from producer and trader SUEK for 172.7 million yuan ($25.74 million), according to an invoice dated June 5 and a source familiar with the situation.

According to the invoice, the letter of credit for the deal was issued by the suburban branch of HDFC Bank Andheri East in Mumbai.

The dollar is the currency of choice for global commodities trading, but some traders say the yuan may increasingly be used to pay for shipments from Russia.

In the invoice, SUEK asks Ultratech to transfer 172.7 million yuan to SUEK’s account at the Shanghai branch of China Everbright Bank. As a correspondent bank, SUEK indicates the Hong Kong branch of the international creditor HSBC.

A correspondent bank acts as an intermediary in transferring money from one bank to another. Reuters was unable to determine whether China Everbright’s payment was received or whether HSBC or any other bank was involved in the transfer.

HDFC Bank and HSBC declined to comment. Ultratech, SUEK and China Everbright Bank did not respond to requests for comment.

It is not clear from the invoice in which currency the RMB payment was made. The amount was quoted in Chinese yuan and Reuters reported last week that Ultratech imported 157,000 tons of coal from Swiss-registered SUEK and agreed to make the final payment in that currency.

Michael Cooper

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