SAIL airlifts Mongolian coking coal sample as India seeks alternative supplies
Steel Authority of India has flown a 1-metric-tonne coking coal sample from Mongolia to India for quality testing. Any long-term supply agreement will depend on the coal’s suitability, delivered cost and the viability of moving bulk cargo from the landlocked producer.
One-tonne sample arrives for testing
Steel Authority of India has airlifted coking coal from Mongolia for the first time, testing whether the landlocked country can become a viable supplier to the Indian steel industry. Reuters reported, citing two sources familiar with the transaction, that the state-controlled steelmaker chartered a 1-metric-tonne sample earlier this month.
SAIL will assess whether the coal meets its steelmaking requirements. According to Reuters, the company’s decision on any long-term supply arrangements will depend on three factors: coal quality, the delivered cost and whether a practical transport chain can be established. SAIL and Mongolia’s Ministry of Mining and Heavy Industry did not respond to the publication’s requests for comment.
Bulk transport remains the central obstacle
Air freight provides a fast way to move a laboratory-scale sample, but it does not resolve the commercial challenge of supplying blast-furnace operations. Mongolia has no direct access to a seaport, so regular deliveries to India would require lengthy rail and maritime connections through another country. An analyst covering metallurgical coal told Reuters that routing the material through Russia would make it significantly more expensive than competing market offers, despite its superior quality.
The test therefore separates the technical question from the logistical one. A positive quality result would show that Mongolian coal can fit SAIL’s raw-material blend, but commercial adoption would still require dependable handling capacity, transit arrangements and a delivered price that can compete with established suppliers. For Mongolian producers, gaining access to India would broaden their customer base; for SAIL, the potential benefit is an additional source of a critical steelmaking input.
India and Mongolia agreed last year to work toward securing supplies of coking coal and copper for Indian companies. Reuters had also reported last year that SAIL was planning the trial. The completed airlift moves that process into physical testing, although the sources did not identify a timetable for laboratory results or subsequent bulk shipments.
Indian import demand is set to grow
India’s limited availability of suitable domestic coking coal makes imports essential for its steel mills. Commodity consultancy BigMint expects the country’s coking coal imports to rise by 3% to 5% in the 2026/2027 financial year from 64 million metric tonnes in the previous year. Australia is expected to remain India’s largest supplier, while analysts also anticipate increased purchases from Russia, Mozambique and the United States.
The Mongolian trial comes as Indian mills face both expanding raw-material requirements and higher costs. Reuters reported earlier this month that steelmakers had raised prices following an increase in coking coal costs and a recovery in domestic demand. As Indian steel production grows, mills will require substantially more coking coal, most of it imported. Mongolia can contribute to diversification only if the advantage of its coal quality survives the cost and complexity of moving bulk volumes to India.