JSW Steel Puts Coking Coal Sourcing Plans from Mongolia on Hold Amid Logistics Challenges

JSW Steel has put its plan to source coking coal from Mongolia on hold, citing significant logistical hurdles in transporting the material from the landlocked Central Asian nation to India, according to a top company executive on Tuesday.

"Mongolia was being explored as an alternative source, but there are a lot of logistics-related issues for transportation.

"As of now, it is not logistically feasible, and the plan is on hold," JSW Steel Joint Managing Director and Chief Executive Officer Jayant Acharya told PTI on the sidelines of the CII Global Sustainability Summit.

Coking coal is a critical raw material used in the production of steel via the blast furnace route.

India is the world's second-largest steel producer. However, the country remains heavily reliant on imports for this raw material.

Currently, India sources over 80-90 per cent of its coking coal requirements from a select group of nations, with Australia being the dominant supplier.

The dependence on distant sources, such as Australia, leads to long shipping durations, often several weeks, and significantly contributes to higher logistics costs for Indian steelmakers.

In recent years, the government has explored the possibility of diversifying coking coal imports to reduce dependency and increase price stability.

In January 2025, a senior government official had stated that discussions were underway to assess viable transport routes for Mongolian coal.

Acharya said the company will continue procuring coking coal from its existing suppliers to meet operational needs.

The government has also been promoting the exploration of domestic coking coal reserves and encouraging steel producers to adopt alternative or low-carbon production methods as part of its decarbonisation roadmap.