India Urges Firms to Acquire Overseas Iron Ore and Coking Coal Assets to Secure Steel Industry Growth
🇮🇳 Government Pushes for Overseas Resource Acquisition
India is actively encouraging domestic companies to acquire overseas assets of key raw materials such as iron ore, coking coal, limestone, and dolomite. This initiative aims to support India’s ambitious goal to expand its steelmaking capacity from the current 200 million tons to 300 million tons by 2030, in response to growing demand.
NMDC Explores International Opportunities
State-run miner NMDC is investigating coking coal assets in Indonesia and Australia. This move is part of broader efforts toward raw material securitization for the steel industry. NMDC’s Chairman, Amitava Mukherjee, stated that the company is looking at this as a business opportunity, with explorations in different stages of negotiations.
JSW Steel’s Strategic Acquisitions
JSW Steel has taken significant steps to secure coking coal supplies by acquiring a 92% stake in Minas de Revuboe (MDR), a coal mining firm in Mozambique, for about $74 million. This acquisition provides JSW access to over 800 million tons of premium hard coking coal reserves. Additionally, JSW is set to gain access to Australian coking coal mines through a 66.67% stake acquisition in an Australian firm for $120 million.
Diversifying Import Sources
India relies on imports to meet 85% of its coking coal needs, with Australia supplying more than half of those shipments. To reduce dependency on traditional suppliers, India is exploring partnerships with Mongolia. Indian steelmakers like JSW Steel and the state-run Steel Authority of India (SAIL) are negotiating with Mongolian authorities to import coking coal, which is not only of superior grade but also cheaper by around $50 per metric ton compared to Australian supplies.
Government’s Unified Procurement Strategy
The Indian government, in collaboration with the steel industry, aims to establish a unified “one nation, one buying coking-coal policy” to strengthen India’s bargaining power over imported coking coal prices. Currently, individual steel manufacturers like SAIL and Jindal independently import coking coal, which limits their leverage with international miners. In FY23, India imported 56.04 million tonnes of coking coal worth ₹1.53 lakh crore, primarily from Australia and the US.