Delhi Explores Mongolian Coking Coal Imports Despite High Transport Challenges And Rising Demand

Delhi is assessing the feasibility of importing coking coal from Mongolia as it seeks to diversify sources for steel production. Despite significant transport and logistical challenges posed by Mongolia’s landlocked location, officials highlight the potential of high-grade coal at competitive prices. With India relying on imports for nearly 85% of its coking coal needs and demand expected to rise, the move reflects New Delhi’s efforts to secure stable, cost-effective supply chains for the expanding steel sector.

India’s steel industry is exploring Mongolian coking coal as a strategic alternative to traditional suppliers, amid rising domestic demand and growing reliance on imports. Currently, over half of India’s coking coal comes from Australia, with Russia and the United States supplying roughly 15% each. Industry analysts note that diversifying sources is essential to mitigate risks associated with supply disruptions, pricing volatility, and geopolitical uncertainties.Mongolia offers high-quality coking coal at potentially lower prices, but its landlocked geography presents substantial logistical hurdles. Two primary trade corridors exist: a longer route through Russia and a route via China. Officials caution that the China corridor may be unreliable in the long term, given Beijing’s strategic interests in Mongolian coal and the possibility of restricted access. Consequently, the Russia corridor is under careful assessment for feasibility and cost-effectiveness.

State-run Steel Authority of India (SAIL) has actively engaged with Mongolian suppliers to examine technical and logistical viability. Earlier this year, trial shipments were planned, including a test order of one metric ton, though deliveries have yet to materialise. A SAIL spokesperson confirmed, “We are in continuous engagement with Mongolian coking coal suppliers to ascertain technical and logistical feasibility for sourcing from Mongolia.”The push to source Mongolian coal aligns with broader goals of strengthening India’s steel supply chain while supporting sustainable urban growth. By securing affordable, reliable raw materials, cities can plan infrastructure projects more efficiently and maintain industrial continuity, indirectly contributing to energy-efficient and climate-resilient urban development. Experts note that diversifying coal sources also reduces dependency on single countries, enhancing resilience against geopolitical tensions and market fluctuations.The exploration of Mongolian coal comes as India cautiously rebuilds economic ties with neighbouring countries, including China, following a prolonged border standoff in 2020. Officials emphasise that sourcing decisions will balance commercial, logistical, and geopolitical considerations, with transport feasibility and pricing remaining key determinants.

If implemented successfully, Mongolian coal could complement existing imports from Australia, Russia, and the United States, stabilising supply and supporting India’s ambitious infrastructure and industrial growth targets. The initiative illustrates how strategic resource planning intersects with urban development imperatives, reinforcing the importance of diversified, cost-effective, and sustainable supply chains for India’s expanding steel sector.

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Delhi Explores Mongolian Coking Coal Imports Despite High Transport Challenges And Rising Demand