India's JSW Steel, SAIL in talks with Mongolia for coking coal shipments, sources say

Steel Authority of India

26/11/2024 09:01

By Neha Arora
       NEW DELHI, Nov 26 (Reuters) - India's JSW Steel
 JSTL.NS  and state-run Steel Authority of India (SAIL)
 SAIL.NS  are in talks with Mongolian authorities to import two
shipments of coking coal, two sources with direct knowledge of
the matter said.
    JSW Steel, the country's biggest steelmaker by capacity,
plans to buy 2,500 metric tons, while SAIL aims to import 75,000
metric tons of the steelmaking raw material from Mongolia, said
the sources who requested anonymity as the plans are not public.
    Both JSW Steel and SAIL would import Mongolian coking coal
either via Russia or China, said the sources.
    "We are just trying to understand how the logistics work,"
SAIL Chairman Amarendu Prakash told Reuters when asked if the
company was looking to receive a shipment from Mongolia.
    SAIL was exploring sourcing coking coal from Mongolia to
diversify its suppliers, it said in an emailed statement to
Reuters.
    India, the world's second-largest producer of crude steel,
meets 85% of its coking coal requirements through imports.
    Late last year, erratic weather conditions hit coking coal
supplies from Australia, which accounts for over half of India's
coking coal imports of around 70 million metric tons a year.
    Since then, Indian steel mills have been seeking to source
coking coal from other countries.
    Last month, a source said India was exploring ways to import
regular supplies of Mongolian coking coal via Russia to reduce
reliance on supplies through China.
    Industry officials say landlocked but resource-rich Mongolia
can offer superior grades of coking coal at relatively lower
prices to India, which is witnessing strong steel demand driven
by rapid economic growth and increasing infrastructure spending.
    Mongolian coal is about $50 a metric ton cheaper than the
Australian supplies, they said.
    India's Jindal Steel and Power  JNSP.NS  is also keen to
source coking coal from Mongolia, one of the sources said.
    India's JSW Steel and Jindal Steel and Power didn't respond
to Reuters emails for comment.
    The Indian government is working to help steel companies
diversify imports to avoid over-reliance on specific countries,
commodities consultancy BigMint said.
    India imported 29.4 million metric tons of coking coal
during the first half of the fiscal year, up nearly 2% from a
year earlier, the consultancy added.

 (Reporting by Neha Arora; Editing by Mayank Bhardwaj and
Christina Fincher)
 ((mayank.bhardwaj@thomsonreuters.com; Twitter:
@MayankBhardwaj9;))