Why is SAIL airlifting coking coal from Mongolia, and what does this signify for India's steel industry?

SAIL is airlifting coking coal from Mongolia as a trial to test the landlocked nation as a potential new supplier, aiming to diversify India’s coking coal imports and reduce its heavy dependence on Australia—which supplies at least half of India’s imported coking coal. The 1-metric-ton sample was flown in earlier this month to assess whether the coal meets SAIL’s steelmaking requirements, reflecting a strategic effort to secure alternative sources amid supply concentration risks and geopolitical considerations. This move aligns with India and Mongolia’s agreement last year to collaborate on securing coking coal and copper supplies for Indian companies.

What are the main logistical and geopolitical challenges facing India’s potential import of Mongolian coking coal?

The main challenges are Mongolia’s landlocked geography—sandwiched between Russia and China—and India’s strained relations with China, which make overland transit through China unlikely; thus, India would likely rely on a longer, more expensive route through Russia—a path Indian authorities have previously indicated preference for due to strategic concerns involving China. Transporting coal via Russia would significantly raise costs compared to competing supplies, even though the Mongolian coal’s quality is reported as superior. SAIL’s decision on long-term procurement will depend on the coal’s suitability, transport cost, and overall feasibility.

India's SAIL Airlifts Mongolian Coking Coal as It Seeks New Supplies, Sources Say

23 hours ago

Steel Authority of India (SAIL) airlifted a coking coal sample from Mongolia to diversify supply sources and reduce reliance on Australia. The state-backed steelmaker will evaluate quality and logistics feasibility via Russia before committing to long-term contracts.

reuters

2026-09-30

India's SAIL Airlifts Mongolian Coking Coal as It Seeks New Supplies, Sources Say

India's SAIL Airlifts Mongolian Coking Coal as It Seeks New Supplies, Sources Say

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