Steel Authority of India tests Mongolian coking coal supply

Steel Authority of India Limited (SAIL) has conducted a trial by airlifting a one-metric-tonne sample of coking coal from Mongolia. The state-owned company will assess whether the Mongolian coal meets the technical requirements necessary for steelmaking.

India is the world’s second-largest crude steel producer but relies on imports for approximately 95% of its coking coal needs, with Australia currently supplying at least half of that requirement. Because coking coal accounts for nearly 40% of steel production costs, diversifying supply sources is a strategic priority for India’s expanding industrial sector.

While the quality of Mongolian coal is noted as high, logistical challenges remain. As a landlocked nation, Mongolia would likely require transport routes through Russia to reach India. This would potentially increase costs compared to existing maritime routes, though India has previously expressed a strategic preference for Russian transit routes due to geopolitical tensions with China.