SAIL Tests Mongolian Coking Coal for Future Supply

Steel Authority of India Ltd (SAIL) has brought a one-tonne sample of coking coal from Mongolia to India for testing, opening a new route in the country’s search for more diversified steelmaking raw materials. The trial comes as rising steel output keeps India heavily dependent on imported coking coal, exposing manufacturers and downstream infrastructure projects to global prices and supply disruptions. 

The Mongolian coking coal sample was transported by air earlier this month and will undergo technical assessment before any commercial decision is made. The test is intended to establish whether the coal can meet the quality requirements of blast-furnace steelmaking and whether its supply can eventually work at a commercially viable scale. India remains structurally dependent on overseas coking coal because domestic supplies do not fully match the quality and volume required by large steel producers. About 95% of India’s coking coal requirement is imported, with Australia accounting for more than half of supplies, according to recent industry estimates. Coking coal is a critical input because it is converted into coke, which supports ironmaking in blast furnaces. 

That dependence has implications beyond steel companies. Higher raw-material costs can feed into prices for construction steel, transport infrastructure, housing and industrial projects. With India pursuing a much larger steelmaking base, securing reliable raw materials will increasingly influence the cost and resilience of future urban and infrastructure investment. Mongolia offers another potential source, but geography creates a substantial constraint. As a landlocked country between Russia and China, its coal would require complex overland logistics before reaching Indian markets. The China route carries strategic complications, while routing supplies through Russia would add distance and potentially raise transport costs. Industry analysis suggests that Mongolian coal may offer attractive quality, but logistics could determine whether that advantage translates into competitive delivered prices. 

The challenge is particularly relevant as India’s coking coal imports are expected to increase during 2026–27. Industry estimates indicate imports could rise by 3–5% from around 64 million tonnes in the previous year as domestic production remains insufficient for steelmakers’ needs.  The latest trial therefore represents more than a procurement experiment. It tests whether Mongolian coking coal can become part of a broader supply network without creating excessive transport costs or additional infrastructure pressures. For India’s expanding steel sector, the next step will be balancing resource security, affordability and the longer-term environmental cost of sustaining coal-intensive production.

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SAIL Tests Mongolian Coking Coal for Future Supply