Mongolia is eager to faucet India as a possible companion for provide of coking coal and has reportedly approached the Steel Ministry to discover possible tie-ups, these acquainted with the developments informed businessline.
Coking coal is a key steel-making uncooked materials and India — the world’s second largest crude metal producer — is amongst the biggest importer of the feedstock. Most of the imports are met from Australia, adopted by the US, Indonesia and Mozambique.
However, in view of accelerating volatility of coking coal costs in current instances, India’s metal mills have been eager to faucet into alternate markets like Russia. US and Indonesian shipments almost doubled in FY23. In FY23, coking coal imports had been 54.3 million tonnes (mt).
“Mongolia is eager to provide coking coal to Indian mills and has approached the Ministry with proposals. In reality, some firm degree discussions had been additionally held. But the choice has to be taken by metal makers,” the official conscious of the discussions mentioned.
It is being mentioned, Mongolia is constructing a washing station for coking coal — with a 2024 deadline — and it might assist export coking coal right here. Joint enterprise tie-ups may be explored.
Major issues
According to officers within the Ministry, one of many main issues raised by Indian mills is the “land-locked nature of Mongolia” and the opportunity of transporting coal “over lengthy distances” main to a rise in prices. Then there are different issues on whether or not the standard of Mongolian coking coal will swimsuit or mix with that of the blast furnaces of Indian mills.
Reportedly, Mongolia has rail connectivity to Russia and China and the ports of those nations. The push is in direction of leveraging these strains for exporting coal. Three main rail tasks have been commissioned in 2022 and 4 new railroad checkpoints might be opened, primarily with a give attention to mineral transportation.
Mongolian coal on exchanges
Mongolia, by the way, is exporting its coal at costs set through auctions on the Mongolian Stock Exchange (MSE), starting February, and has reportedly stopped signing direct gross sales contracts with abroad patrons.
The authorities there accredited a regulation requiring events concerned in coal exports to make their trades by way of open digital buying and selling through the MSE.
Under the earlier buying and selling mechanism, patrons solely paid mine-mouth costs to miners and sorted out the logistics by themselves. The new so-called “border costs” will issue within the transportation charges and goal to simplify the coal export course of, it’s being mentioned.
