India will import coking coal from Mongolia on a test basis

Thus, the country seeks to diversify the supply of key raw materials

India will import coking coal from Mongolia on a trial basis from the end of July, Reuters reports, citing sources.

The country is currently seeking to diversify its imports of this raw material to reduce its overdependence on Australia.

Steel companies, including JSW Steel and the state-owned Steel Authority of India (SAIL), are ready to receive coking coal from Mongolia after several months of negotiations, the sources said.

It is expected that JSW Steel will receive about 30 thousand tons of Mongolian raw materials, SAIL is likely to receive 3 to 5 thousand tons. For JSW Steel, this will be the second such supply after 2021, when the largest steel producer in India bought 8 thousand tons.

According to insiders, the cargo will be delivered to India via Chinese ports. However, the Indian authorities cannot rely on China in this matter, so the country is trying to find alternative ways.

Indian factories have asked the government to intervene and help develop routes that would ensure regular supplies from Mongolia, which offers higher quality raw materials. In addition, some companies are considering buying or leasing coal and copper assets in the country.

Indian steelmakers consume about 70 million tons of coking coal annually, with imports accounting for about 85% of total needs. Local steelmakers are struggling with unstable supplies of this raw material from Australia, which usually accounts for more than half of India’s annual imports.

In recent months, Indian steelmakers have stepped up imports of coking coal from Russia to take advantage of cheaper prices due to Western sanctions.

As GMK Center reported earlier, India will stimulate iron ore enrichment for the needs of the steel industry and its transition to environmentally friendly steel production. Due to the growth of metallurgical capacities, the availability of raw materials with a higher iron content remains in question