India's Steel Ministry has asked state-run SAIL and NMDC to explore buying mineral assets overseas to secure raw materials and keep costs in check. Indian steelmakers import 85-90% of their coking coal, mainly from Australia and Mozambique.
At a glance
- A senior ministry official confirmed the request but did not name target countries or minerals.
- JSW Steel has already bought coking coal assets abroad and aims to source half its raw materials captively.
- NMDC wants at least 20% of its revenue from minerals other than iron ore by 2030.
Background
Steel is made mainly from iron ore and coking coal, a hard coal that is baked into coke to fuel blast furnaces. India has plenty of iron ore but relies on imports for most of its coking coal. Steel Authority of India (SAIL) is the country's largest state-owned steelmaker, and NMDC is its leading iron ore miner.
What happened
The Steel Ministry has asked SAIL and NMDC to look for mineral assets abroad, a senior official told the Press Trust of India on October 4. The aim is to secure long-term raw material supply and support input costs.
The official confirmed the request but gave no further details. Earlier this year, Reuters reported that both companies were exploring coking coal assets in Russia, after an Indian delegation held preliminary talks there in May. SAIL also set up an internal panel to study sourcing coking coal from Russia.
Why it happened
The weak link is coking coal. Indian steelmakers, including SAIL, import 85-90% of what they need, mostly from Australia and Mozambique. Limestone, another steelmaking input, also comes in from West Asia.
That leaves Indian mills exposed to price swings and supply shocks abroad that they cannot control. Owning mines overseas lets a steelmaker lock in part of its supply. Private producer JSW Steel has already bought coking coal assets abroad as part of a plan to meet 50% of its raw material needs from its own sources.
What it means for India
For NMDC, the push fits a plan to grow beyond iron ore. Chairman Amitava Mukherjee has said he wants at least 20% of the company's revenue to come from other minerals by 2030.
Buying and developing mines abroad takes years, so the move will not change Indian steel costs soon. Its value would show in the next coking coal price spike, if state-run mills by then own part of their supply. The bigger questions are where the companies will look and how they will pay.
Our read
Outlook: neutral. The directive is an early policy step with no named deals, so it does not change iron ore or coking coal supply now. Its effect on Indian steel costs would come only years later.
What to watch
- Any named target countries or assets from SAIL or NMDC.
- Progress in talks with Russia over coking coal assets.
- How SAIL and NMDC plan to fund any overseas purchases.
For information only, not investment advice.
Iron price in India
metalscost.com India reference price as of 2026-10-16.
Detailed analysis
Timeline
- 2026-10-04: A Steel Ministry official confirms SAIL and NMDC have been asked to explore mining assets abroad.
Supply Drivers
India imports 85-90% of its coking coal, mainly from Australia and Mozambique.
Government Policies
The Steel Ministry has asked state firms to secure mines abroad for long-term raw material supply.
What could lift prices
- Indian state buyers competing for overseas coking coal assets could raise their value.
- India's heavy reliance on imported coking coal keeps raw material demand from its mills high.
What could weigh on prices
- Captive overseas supply could reduce Indian mills' exposure to coking coal price spikes over time.
- NMDC's push into other minerals may shift some of its capital away from iron ore.
Country impact
| Country | Impact | Reason |
|---|---|---|
| India | High | The plan targets the steel industry's 85-90% dependence on imported coking coal. |
| Australia | Medium | It is one of the main suppliers of coking coal to Indian mills. |
| Russia | Low | SAIL and NMDC were reported to be exploring coking coal assets there earlier this year. |
Industry impact
| Industry | Effect | Reason |
|---|---|---|
| Steel Manufacturing | Positive | Captive raw material supply could make Indian steel costs more predictable. |
| Coal Mining | Positive | Overseas coking coal miners gain potential new buyers for their assets. |
Who gains, who loses
- Indian state-run steelmakers: Owning mines abroad could shield them from coking coal price spikes.
- Coking coal traders selling to India: Captive supply would reduce how much Indian mills buy on the open market.
Other ways this could play out
- If SAIL and NMDC secure overseas mines, Indian state mills could cover part of their coking coal needs captively.
- If no suitable assets are found at a fair price, India's import dependence will stay at 85-90%.
Price risks
- A coking coal price spike before any deal closes would raise Indian steel costs regardless.
- Heavy borrowing to fund acquisitions could strain SAIL's and NMDC's finances.
Technical view
Price is trading below both its 20-period and 50-period moving averages, a bearish alignment.
Computed from metalscost.com's own stored price history.
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