JSW Steel and SAIL Look to Mongolia for Coking Coal Imports Amid Rising Steel Demand

India’s leading steelmakers, JSW Steel and Steel Authority of India Limited (SAIL), are exploring coking coal imports from Mongolia as part of efforts to diversify sourcing and reduce dependency on Australia. While JSW plans to procure 2,500 metric tons, SAIL aims for 75,000 metric tons of Mongolian coking coal.

Coking coal, vital for steel production, is mostly imported, with India relying on overseas supplies for 85% of its needs. Traditionally, Australia provides over half of India’s annual 70 million metric tons of coking coal imports. However, disruptions caused by erratic Australian weather have forced Indian companies to look elsewhere.

Mongolia has emerged as a competitive supplier, offering higher-grade coal priced $50 per metric ton lower than Australian alternatives. Despite being landlocked, Mongolian coal imports are expected to be routed through Russia or China, presenting logistical challenges but significant cost benefits.

The move comes amid India’s surging steel demand driven by economic growth and infrastructure expansion. The government is supporting diversification strategies to reduce reliance on single-country imports. In the first half of this fiscal year, India’s coking coal imports increased by 2% to 29.4 million metric tons, underscoring the rising demand.

Jindal Steel and Power is also reportedly considering Mongolian coal, highlighting the industry’s broader efforts to secure reliable and cost-effective raw material sources.