Mongolia has initiated talks with the Indian government seeking facilitation in supplying coking coal to domestic steel companies, sources in Ministry of Steel said on Tuesday, June 13.
The sources said that representatives of the Mongolian government have informed their Indian counterparts that the several coal washeries will be operational by 2024 and Mongolian authorities are seeking joint venture partners for these washeries with guaranteed off-take conditions.
However, Indian officials pointed out that there are several issues which need to be sorted out before coking coal could be imported from the country.
It was pointed out that it is for Indian steel companies to enter into supply contracts directly with Mongolian mining agencies and Indian government could only act as a facilitator and not in position to act as intermediary to any such imports.
At the same time, from consultations with domestic steel companies it has been learned that major challenge for import coking coal was Mongolia being a land locked country, there would be logistical challenges and costs of transporting such imports through Russia or China.
Indian steel mills have also expressed uncertainty over pricing of such imported coking coal. Mongolian coking coal price is determined through the auction route and negotiated supply contracts directly between buyers and seller are not permitted in which case the auction discovered price might not be viable for Indian importers.