India is strategising the creation of a consortium comprising state-owned enterprises to streamline coking coal imports, aiming to alleviate shortages faced by domestic steel companies, according to two undisclosed government sources. Faced with diminished supplies and elevated prices of coking coal, major Indian steel firms have appealed to the government for assistance in bolstering the availability of this crucial raw material for steel production.

Annually, Indian steel companies consume approximately 70 million metric tons of coking coal, with imports accounting for about 85% of the nation's overall demand. India, the world's second-largest producer of crude steel, has encountered challenges in securing stable supplies of coking coal from Australia, which traditionally contributes more than half of India's annual imports. Apart from Australia, India also imports coking coal from the United States, Indonesia, Canada, and other countries.

The proposed consortium, backed by government entities, aims to simplify the import process for steel companies by engaging with suppliers globally, negotiating prices and import terms, and subsequently distributing the acquired raw material to local steel mills, the sources explained. However, they chose to remain anonymous as they lack authorisation to speak with the media and did not disclose the names of potential participating companies.

The consortium's objectives extend beyond facilitating imports, with plans to diversify India's sources of coking coal. One of the sources emphasised the goal of obtaining competitive prices and exploring alternatives beyond Australia to broaden the import portfolio.

The Ministry of Steel at the federal level has not yet responded to requests for comments. Despite Australia's assurances in November regarding steady coking coal supplies, the situation remains erratic. To address this, the sources indicated that India intends to increase coking coal imports from Russia, citing both the need for consistent supply and the cost advantage compared to Australian shipments.

Before the consortium becomes operational, the government is expected to resume formal discussions with Mongolia to explore coking coal sourcing opportunities, the sources noted. Mongolia, renowned for its mineral resources, faces challenges in establishing a viable transportation route to deliver the raw material to India, being a landlocked country neighbouring China and Russia.