India Pushes for Overseas Raw Material Acquisitions to Boost Steelmaking Capacity

India is actively seeking Indian companies to acquire raw material assets overseas, in an attempt to integrate India’s steel supply chain as it strives to achieve capacity growth in steel production. Steel Secretary Sandeep Poundrik explained in a gathering of industry players in Mumbai on Saturday that India has no option but to import strategic raw materials like iron ore, coking coal, limestone and dolomite from foreign markets to drive India’s ambitious development plan.

India, the second-largest producer of crude steel in the world, is set to double its capacity to 300 million tons by 2030 from 200 million tons currently. With the backdrop of the reality that import of coking coal would be increasing at an exponential rate to 160 million tons by 2030 from the existing level of 58 million tons In the import of coking coal, it will rise at a higher level to 160 million tons by 2030 from the current level of 58 million tons The proposal is in the direction of enhanced use of domestic steel in infrastructure, automobile, and construction sectors.

But there are problems. While total production of steel has gone up, Indian imports of coking coal fell 0.7% year on year to March, prompted by a fall mainly in arrivals from leading producer nations Australia and the US. India now depends on imports to meet 85% of its requirement for coking coal, and over half that amount comes from Australia.

In seeking risk management of its supply chain, India is also searching for alternative sources. One of them is with Mongolia but logistics being landlocked remains an issue. State-owned miner NMDC is also looking at coking coal assets in Indonesia and Australia as it widens sources of supply.

This unwanted buying burden is regarded as a giant leap towards increasing the supply of raw material availability and production security in India while it pursues its ambitious 2030 steelmaking plan.