India’s JSW Steel Limited and Steel Authority of India Limited (SAIL) are in talks to import coking coal from Mongolia, attempting to diversify sourcing of the steelmaking raw material, according to industry sources and media reports on Wednesday, November 27.
The sources said that preliminary talks are based on sourcing 2,500 mt of coking coal by JSW Steel and 75,000 mt by SAIL.
The imports are expected to be routed through either Russia or China, as logistics planning remains a key focus, the sources said.
Mongolia, though landlocked, has emerged as a viable option for coal imports. 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.
Australia traditionally supplies over half of the approximately 70 million metric tons imported by India annually. However, disruptions caused by erratic weather conditions in Australia last year have prompted Indian steelmakers to explore alternative sources.
Earlier this year, the Indian government had formed a consortium of state-run coal mining, railways, infrastructure and engineering consultancy companies to undertake turnkey projects in Mongolia and build necessary logistics and infrastructure to import coking coal for Indian steel companies.
It is felt that, with Mongolia being landlocked, there were infrastructure challenges facing shipping coking coal from the country to India, with exports of coking coal from the country depending on routes, infrastructure and logistical support from Russia and China.
