India tests Mongolian coking coal as it explores new suppliers beyond China
State-owned steelmaker SAIL has airlifted a one-tonne coal sample from Mongolia to assess its quality and suitability for Indian production processes.
India’s state-owned SAIL begins testing Mongolian coking coal for use in steelmaking
ULAANBAATAR — Steel Authority of India Ltd. (SAIL), India’s state-owned steelmaker, has begun a trial import of Mongolian coking coal to assess its suitability for the country’s steel industry, highlighting a potential opportunity for Mongolia to expand its coal exports beyond China.
According to Reuters, SAIL has airlifted a one-tonne sample of coking coal from Mongolia and is examining its quality characteristics and suitability for use in India’s steelmaking processes. The trial import is an initial step in determining whether Mongolian coking coal meets the requirements of India’s steel industry.
India is seeking new coking coal suppliers as it works to expand domestic steel production and diversify its supply chain, which remains heavily dependent on Australia.
India’s steel industry is growing
Coking coal is a key raw material in steel production, and India’s import requirements are expected to rise as its steel industry expands.
Reuters reported that India’s demand for coking coal is expected to grow by 3–5 percent in the 2026/27 financial year. The country relies heavily on foreign suppliers to meet its coking coal needs, with Australia remaining its main supplier.
The Indian government’s drive to increase domestic steel production is further raising the need for reliable and diversified sources of raw materials.
Against this backdrop, growing interest among Indian buyers in Mongolian coking coal could open a new market for Mongolia.
Mongolia’s coal exports remain heavily dependent on China
Mongolia is one of the world’s major coking coal exporters, with most of its coal supplied to China.
China is Mongolia’s nearest and largest market because of its geographic location. The Gashuunsukhait–Gantsmod and Shiveekhuren–Sekhe crossings are the main gateways for Mongolian coal exports to the Chinese market.
However, relying on a single market for most export revenue leaves Mongolia’s earnings vulnerable to commodity prices, cycles in China’s steel industry, import policy and conditions at the border and ports.
Developing coal trade with major Asian consumers such as India is therefore strategically important for diversifying Mongolia’s export markets.
To reach the Indian market, however, Mongolia will need to compete not only on coal quality but also address transport, logistics, pricing and supply reliability.
Why was the one-tonne coal sample airlifted?
The air shipment of the Mongolian coal sample under SAIL’s trial does not represent a commercial-scale export.
Instead, it is an initial testing phase in which the Indian buyer is assessing the coal’s quality, chemical composition, coking properties and compatibility with steelmaking technology.
If the test results are positive, the next step would be to examine the delivery of larger volumes to India through a combined sea, rail and road transport network.
The air shipment of one tonne is therefore not itself a significant measure of economic exports, but it is important as a trial that could initiate a future supply relationship.
Logistics pose the biggest challenge
As a landlocked country, Mongolia would need to address transit through China in order to supply coal to the Indian market.
Reuters reported that logistics costs would be one of the main challenges in transporting Mongolian coal to India. The geographic distance between Mongolia and India, together with the need to transit China, could make it difficult for Mongolia to compete with established suppliers such as Australia.
In addition, a multistage logistics network would be needed to transport Mongolian coal from the Chinese border to a seaport, then onward to an Indian port and finally to end users.
For Mongolian coal to become competitive in India, Mongolia would therefore need to address not only production volumes but also new export transport corridors, port capacity, rail connections and long-term supply agreements.
Indian demand could create a new opportunity for Mongolia, but the market is not yet assured
India’s testing of Mongolian coking coal could open a new opportunity in bilateral trade, but it is still too early to conclude that Mongolian coal will become a regular supply to the Indian market.
The next steps following SAIL’s trial import will depend on the coal quality assessment, the results of tests in steel production, the supply price and logistics costs.
If Mongolian coal meets the requirements of India’s steel industry and its total delivered cost proves competitive, India could become a major new consumer of Mongolian coal.
This would mean more than simply adding another buyer for Mongolia. With Mongolian coal exports still concentrated in the Chinese market, access to India could reduce export risks and expand Mongolia’s position in international coal markets.
The next step for Mongolia’s coal industry
Mongolia is focusing in 2026 on increasing coal exports while improving export infrastructure. Projects such as the Gashuunsukhait–Gantsmod cross-border railway and the Shiveekhuren–Sekhe rail link could increase capacity to deliver Mongolian coal to China and, over the longer term, support the development of regional transport corridors.
For India, testing Mongolian coal is part of a broader strategy to explore new suppliers from mainland Asia alongside traditional suppliers such as Australia, the United States and Canada.
If Mongolian coking coal meets quality requirements and logistics costs can be reduced, Mongolia could benefit more from growing demand for raw materials in the global steel industry.
SAIL’s trial currently involves only a one-tonne coal sample, but positive results could mark the beginning of broader commercial ties directed toward markets beyond China for Mongolia’s coal exports.
Published by Medicaldaily.com