SAIL to Test Mongolian Coking Coal Import as India Eyes Reduced Reliance on Australia

India’s state-owned steel producer, Steel Authority of India Limited (SAIL), will pilot a coking coal import from Mongolia, industry and company sources said. The action is a strategic move towards diversifying the nation’s coking coal supply, which is now largely dependent on Australia.

The trial cargo, only a metric ton expected, will test the viability of imports from the landlocked Central Asian Republic. Logistics of transport are being coordinated, with carrying the goods through China an option that is being considered.

If the trial works out, SAIL can start importing around 75,000 metric tons of Mongolian coking coal every year, sources added. The move is part of India’s larger strategy to decrease its reliance on Australian coking coal, which currently meets more than 50% of the nation’s requirement for the vital steel-making input.

In search of new sources, the Indian government has been actively seeking Mongolian coal deposits. A top-level Indian delegation toured Mongolia late last year to evaluate the region’s export potential and examine the current infrastructure.

To meet the logistics hurdles, India has also suggested the creation of a consortium of state-owned firms such as coal mining, railways, infrastructure, and engineering consultancy companies to implement turnkey projects in Mongolia. The plan is to construct the necessary infrastructure to enable long-term coking coal imports to India.

While world steel demand continues to be strong and geopolitical risks persist in shaping commodity trade flows, India’s move to access Mongolia’s coal resources could strengthen its energy security and supply resilience.