Steel Authority of India Airlifted Mongolian Coal
The company transported a test shipment in September 2026 to evaluate alternative coking coal sources.
Updated on Sept. 30, 2026 in Oil and Gas
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The Steel Authority of India airlifted a 1-metric-ton sample of coking coal from Mongolia in September 2026. This trial effort follows a 2025 agreement between the two nations to secure critical coal and copper supplies.
Why it matters
India imports roughly 95% of its coking coal, which accounts for nearly 40% of steel production costs. Diversifying supply chains beyond current major partners like Australia is essential for domestic industry stability.
India relies on imports for 95% of its coking coal, a commodity representing 40% of steelmaking expenses. Imports are projected to grow by 3% to 5% throughout the 2026/27 period.
The players
Steel Authority of India
This major government-owned steel producer is one of the largest steel makers in India.
The details
The steelmaker sought a new supplier because domestic coal supplies do not fully meet production needs, while logistics for Mongolian coal require transit through Russia to bypass China. The company is currently assessing if this specific sample meets the necessary quality standards for manufacturing.
Timeline
2020: A deadly border clash occurred between India and China.
2025: India and Mongolia agreed to secure coal and copper supplies.
September 2026: Steel Authority of India airlifted the coal sample.
2026/27: India expects a 3% to 5% rise in coking coal imports.
Market Landscape
This move reflects a broader strategic shift to reduce dependency on Australia, which currently supplies at least 50% of India's imported coking coal. The effort underscores the intense competition to secure raw materials amid complex regional geopolitical transit challenges.
The effort to source coal more efficiently aims to mitigate the high costs of steel production that often lead to price hikes for consumers. Customers may see more stable pricing if domestic steelmakers successfully diversify their raw material imports.
The takeaway
Securing alternative fuel sources is a critical logistical challenge for global manufacturing giants facing regional transit obstacles. Companies are increasingly prioritizing supply chain diversification to insulate their operations from single-source reliance.
Further reading
For more on industry fuel sourcing, visit our /business/industry/oil-gas/ section.
Source note: This article includes information reported by @businessline.
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