The Coal Trader

India begins talks with Mongolia to increase coking coal purchases

Indian government officials said on November 20 that India is negotiating with Mongolia to seek opportunities to invest in the country’s logistics infrastructure to promote the import of coking coal. He said the talks came after the domestic steel industry faced uncertainty, disruption and price volatility over imports of coking coal from Australia.

The official said the Indian government is seeking detailed information on coking coal mines, coking coal mine operations, coal washing plants and logistics to enhance understanding of the Mongolian coal mining industry, which in turn will enable Indian investors to identify investment opportunities and fill gaps. .

As a landlocked country, coal shipments from Mongolia to India require transshipment via rail and port facilities in Russia and China. The Indian government is looking to set up a working group to explore these areas as well as facilitate investments and necessary logistical connections to increase imports of Mongolian coking coal.

However, Mongolia’s current coal exports are based on auction prices on the Mongolian Stock Exchange and do not allow contracts based on spot sales, an issue the two countries are also discussing.

Since February, Mongolia has begun exporting coal through auction prices on the Mongolian Stock Exchange, and Mongolia has reportedly stopped signing direct sales contracts with overseas buyers.

The Mongolian government approved a regulation requiring parties involved in coal exports to conduct transactions through public electronic trading on the Mongolian Stock Exchange. Under the previous trading mechanism, buyers only paid the mine price to the miners and solved logistics problems by themselves. It is said that the new so-called “border price” will be included in transportation costs, aiming to simplify the coal export process.