NEW DELHI: India’s JSW Steel and Steel Authority of India (SAIL) are in talks with Mongolian authorities to secure imports of coking coal, signalling a strategic move to diversify their supply sources, Reuters has reported.
JSW Steel plans to purchase 2,500 metric tons, while SAIL aims to secure 75,000 metric tons.
Coking coal is also known as metallurgical coal. It is a high-grade bituminous coal that’s used to produce coke, which is a key component in steelmaking. India, the world’s second-largest crude steel producer, relies heavily on imports for 85 per cent of its coking coal needs.
Australia traditionally supplies over half of the approximately 70 million metric tons imported annually. However, disruptions caused by erratic weather conditions in Australia last year have prompted Indian steelmakers to explore alternative sources.
Mongolia, though landlocked, has emerged as a viable option for coal import. The resource-rich country could become a competitive supplier for India’s growing steel industry. Mongolia is offering higher-grade coking coal at prices about $50 per metric ton lower than Australian coal.
The imports are expected to be routed through either Russia or China, as logistics planning remains a key focus.
With growing steel demand fuelled by India’s economic expansion and infrastructure projects, this price advantage could play a crucial role in cost efficiency for Indian producers. The Indian government is also supporting steel companies in diversifying their sourcing to minimise over-reliance on any one country, the report mentioned.
During the first half of the financial year, India’s coking coal imports rose nearly 2 per cent to 29.4 million metric tons. Jindal Steel and Power is also reportedly interested in sourcing Mongolian coking coal, further highlighting India’s need to broaden its supplier base.
Source; Business Standard
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