By Neha Arora
NEW DELHI (Reuters) -India’s state-run Steel Authority of India Ltd plans to import a trial cargo of coking coal from Mongolia this month and may transport the sample by air to speed up testing, two sources familiar with the matter said.
The move is part of SAIL’s efforts to diversify its coking coal sources beyond Australia – a major supplier to India, but a country from which India has faced supply disruptions.
The trial shipment will consist of 1 metric ton of coking coal from landlocked Mongolia.
As an alternative to flying in Mongolian coal, SAIL could also consider routing it via China, depending on logistics, the sources said, declining to be named as the matter is not public.
SAIL is preparing to import a larger shipment of 75,000 metric tons from Mongolia, depending on the results of the quality check for the initial sample, the sources said.
The Mongolian prime minister’s office and SAIL did not respond to requests for comment.
India, the world’s second-largest crude steel producer, meets about 85% of its coking coal requirements through imports. More than half of those shipments come from Australia.
To reduce reliance on Australia, India has been seeking alternative sources of high-grade coking coal. Mongolia, which holds substantial reserves, has been identified as a potential partner offering competitive prices.
However, its landlocked geography and limited infrastructure pose logistical challenges.
Sandeep Poundrik, the most senior civil servant in India’s Ministry of Steel, said last month that transporting bulk cargo from Mongolia remains difficult.
Poundrik said India’s coking coal imports are expected to accelerate due to the limited availability of the key steelmaking ingredient, amid a ramp-up in steel capacity.
“Indian steel mills are actively diversifying their coking coal sourcing beyond Australia, tapping into regions such as Mozambique, Russia, U.S., Canada, and Indonesia,” commodities consultancy BigMint said.
Reuters reported last week that JSW Steel, India’s largest steelmaker by capacity, has encountered difficulties in sourcing coking coal from Mongolia due to unresponsive suppliers and transportation bottlenecks.
(Reporting by Neha Arora; editing by Mayank Bhardwaj and Ros Russell)
