JSW Steel sorting logistics of buying coking coal from Mongolia - MD
Informist, Friday, Sep 27, 2024
By Priyasmita Dutta
NEW DELHI – JSW Steel Ltd along with the Indian government is studying the modalities, especially the logistics, of importing coking coal from landlocked Mongolia, its Managing Director and Chief Executive Officer Jayant Acharya said. While the company is interested in importing coking coal from Mongolia, there are a few challenges, Acharya told Informist.
"It is a big challenge because you have to go through the Chinese or Russian side, so the logistics equation is very tight. We are looking at it," Acharya said. Without a dependable route, mineral-rich Mongolia would struggle to sell raw materials to India.
Acharya's comments come at a time when the government has been looking at diversifying the sources from where India imports coking coal – a key raw material for the steel industry – to ensure that supply chain disruptions do not impact domestic capacity. This will also help India to cut down its over-dependence on coking coal imports from Australia.
"If it (importing from Mongolia) becomes economical, then we will surely look at it from the supply perspective," Acharya said.
India's relations with China have become frosty since the military confrontation on the Himalayan border in June 2020, with both countries mobilising their military on the border ever since. On the other hand, though New Delhi shares a cordial relationship with Moscow, Russia continues to face sanctions from Western countries following the invasion of Ukraine.
In fact, Indian steelmakers have been importing coking coal imports from Russia in recent months to take advantage of cheaper prices. India, the world's second-largest steelmaker, is the largest importer of coking coal, with Australia accounting for 70% of supplies. Coking coal is a key raw material which accounts for 35-40% of the steel-making costs.
Currently, a JSW Steel team is negotiating some trial shipments from Mongolia, Acharya said, adding that the quantum of import will be entirely dependent on the quality of the product. "So unless we try some samples, we can't really determine it. It's a very technically important product," he said.
While Mongolia is one of the countries that is on the radar, Acharya said that the company was focussing on domestic procurements through coal linkages and auctions. "We are trying to see that we use more of those and blend and become self-reliant," he said. Today, shares of JSW Steel ended at 1,001.55 rupees on the National Stock Exchange, down 0.4% from the previous close.
Earlier today, Steel Secretary Sandeep Poundrik said at an event that diversification of import sources of coking coal comes against the backdrop of India's rising demand for steel, which will mean a sharp scaling up of domestic capacity to meet that demand. End
