Blog

India’s push to build more blast furnaces to meet its growing demand for steel raises a critical concern: It will result in increased imports of metallurgical coal. Industry leaders highlighted the risks of such import reliance at the Indian Steel Association’s Coking Coal Summit in September. 

India is currently dependent on imports for around 90% of its metallurgical coal needs, and in the first eight months of 2025, nearly half of it came from a single country—Australia.

Statements from Australian coal miners have indicated that the energy security risks for India are on the rise.

Australia is by far the world’s biggest exporter of metallurgical coal—which includes coking coal and pulverised coal injection, both used in blast furnaces—with most of its production based in Queensland. However, data analytics firm Wood Mackenzie, warns that Australia requires over 100 million tonnes per annum of new hard coking coal (HCC) mine capacity by 2050 to avoid a supply shortfall. 

A factor threatening to worsen this shortfall is Queensland’s contentious progressive royalty regime, introduced in 2022, under which royalty rates increase with the price of coal.

In recent weeks, major Australian met coal miners reported their financial results, taking the opportunity to highlight how Queensland’s royalty rates are deterring investment in new mine capacity. 

Long-term met coal investment in doubt

Two of Australia’s key suppliers to India—BHP and Whitehaven Coal—have been vocal in their criticism of Queensland’s royalty regime. 

BHP, the world’s largest mining company and Australia’s leading met coal exporter through its BHP-Mitsubishi Alliance (BMA) joint venture, is a critical supplier to Indian steelmakers. A previous company statement disclosed that 40% of the company’s met coal exports go to India.

On the royalty regime, BHP has made its position clear. In its latest company statement, CEO Mike Henry said BHP will “not invest any growth capital in Queensland, both for cost and risk”, adding that the royalty hike means the state is “no longer investible” for long-term projects. 

In its most recent Economic and Commodity Outlook, the company reinforced this position, noting that “new seaborne supply will increasingly be challenged as Queensland’s royalty and approvals environment remain unconducive to long-life capital investment”.

Paul Flynn, Whitehaven’s CEO, has voiced similar concerns, emphasising that Queensland’s royalty regime is already diverting capital into New South Wales (NSW). However, with production in NSW dominated by thermal coal, this shift risks restricting future investment in met coal capacity—a concern for India.

Another met coal producer in Australia, Peabody, also hit out at the royalty regime. In late August, its chief financial officer Mark Spurbeck said, “With some steelmaking coal producers in Queensland struggling and even failing at current prices, the royalty structure is out of touch with industry fundamentals.”

Meanwhile, the Queensland government has ruled out changes to the coal royalty scheme.

Solutions for India—beyond Australian coal

According to S&P Global, India received 54.5 Mt of coking coal in the January-August 2025 period. Of this, Australia supplied 26.4 Mt (49%), while Russia supplied 13.3 Mt (24%), the US 6.7 Mt (12%), and Mozambique 4.2 Mt (8%).

The Financial Services Regulatory Authority (FSRA) of Abu Dhabi Global Market (ADGM) has released Consultation Paper No. 10 of 2025, introducing a dedicated regulatory framework for the staking of virtual assets. This proposal marks a significant evolution in ADGM’s approach, transitioning from initial recognition of staking to the establishment of a formal regulatory perimeter around such activities. By focusing on staking, the FSRA aims to enhance ADGM’s position as a forward-looking jurisdiction for digital asset innovation, while ensuring robust oversight of emerging virtual asset functions.

In December 2024, the FSRA signalled its intent to regulate staking by raising key questions around the associated risks in its consultation papers. These initial papers concentrated on foundational issues, such as defining operational models for staking businesses. However, they did not address broader regulatory considerations; specifically, the principles that trigger oversight and the obligations placed on authorised persons conducting staking activities.

Consultation Paper No. 10 of 2025 seeks to close these gaps by proposing a set of regulatory triggers and requirements for entities that stake virtual assets on behalf of their clients.

What triggers regulatory oversight?

Under the proposals, regulatory oversight is triggered when staking activities involve accepted virtual assets within the scope of regulated operations. Authorised Persons who hold or control virtual assets for the purpose of staking are required to obtain a Financial Services Permission for either custody or managing assets. Virtual Asset Custodians may only stake client assets upon receiving explicit instructions from the client. If such custodians intend to exercise discretion in staking decisions, they must secure a Financial Services Permission for managing assets. Conversely, Virtual Asset Managers are permitted to stake client virtual assets on a discretionary basis, provided they are responsible for selecting appropriate staking opportunities and ancillary service providers.

Areas outside the scope of the proposal

The proposed framework draws clear boundaries around what falls outside the scope of regulatory oversight. Solo staking remains unregulated, as participants act solely on their own account without any form of intermediation. Service providers that deliver technical infrastructure to support staking are also excluded, provided they do not hold or control virtual assets. Additionally, the regime does not extend to other yield-generating activities such as liquidity mining, yield farming, or the issuance of liquid staking tokens which are also typically referred to as staking. Its focus is strictly limited to arrangements involving participation in blockchain validation under a proof-of-stake consensus mechanism.

Regulatory obligations

The proposal also sets out a series of regulatory obligations for authorised persons engaging in staking activities involving client virtual assets. These entities must:

1. comply with all existing applicable requirements under Chapter 17 of COBS and AML rules
2. disclose material risks to clients in a clear, fair, and non-misleading manner
3. conduct due diligence on staking service providers and smart contracts
4. enter into written agreements with staking service providers
5. provide client reporting
6. obtain FSRA non-objection

This paper signals a turning point in how staking is treated under regulatory frameworks. It’s a prime opportunity for firms to align early with supervisory expectations and shape compliant, scalable staking models before the market matures.

Who should care?

• VA Custodians
• VA Managers
• Exchanges
• Staking Infrastructure Providers
• DeFi platforms

What to watch and next steps

It is imperative that clients closely review the supporting guidance to be issued by the FSRA on implementation of this proposal, as it will clarify critical nuances in regulatory oversight. In particular, forthcoming guidance on staking-specific disclosures will be essential for ensuring compliance and shaping operational responses. Understanding these details will help entities navigate the framework in the future.

At present, clients should begin by evaluating whether they meet any of the regulatory thresholds outlined in the framework. From a commercial standpoint, firms engaged in or planning to engage in these activities will find new opportunities emerging. However, a clear understanding of their eventual obligations to the FSRA will be essential to ensure full compliance and avoid regulatory pitfalls.

ADGM’s updated regulatory framework signals a broader shift toward functional regulation; focusing on what digital assets do, rather than simply what they are. With the inclusion of specific staking activities under its oversight, the FSRA is reinforcing ADGM’s position as a forward-looking jurisdiction committed to shaping the future of the digital asset ecosystem.

Our team is advising clients across sectors on regulatory compliance, infrastructure, and risks. If you would like to discuss how these proposed reforms could affect your business or how to turn regulatory change into competitive edge please get in touch with Tom Bicknell or Barkha Doshi.