In October, a delegation from India, including senior government officials, is scheduled to visit Mongolia to explore potential coking coal imports. This initiative is part of India's strategy to diversify its raw material sources, improve the availability of essential steelmaking resources, and reduce production costs.
India currently imports around 56 million tons of coking coal annually, with the majority—70-90%—coming from Australia. This reliance leads to high logistics costs due to the long shipping distances. Mongolia, being geographically closer, presents a more cost-effective alternative for Indian steel producers.
Indian authorities are actively exploring the feasibility of importing coking coal from Mongolia, with an industry delegation visiting the country. A government team is also expected to arrive to take these discussions forward. In addition, major Indian steelmakers such as JSW Steel are working with the government to examine the logistics of importing coal from Mongolia. While there are challenges in transporting coal through China or Russia, trial shipments are being negotiated to assess its quality. The success of these imports will largely depend on whether the logistics can be managed in a cost-efficient manner.
India has also sought to diversify its coking coal supply by turning to Russia, attracted by lower prices despite the country's sanctions. Since coking coal accounts for 35-40% of steel production costs, reducing reliance on Australia by sourcing from countries like Mongolia is critical to maintaining a stable supply chain and keeping costs under control.
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