Background India is the world’s second‑largest steel producer, with the public‑sector giant Steel Authority of India Ltd (SAIL) and the iron‑ore specialist NMDC playing pivotal roles. Despite abundant domestic iron ore, the sector remains heavily reliant on imports for key inputs such as coking coal and limestone.
Ministry Directive A senior official from the Steel Ministry confirmed that SAIL and NMDC have been asked to explore mining assets abroad. The directive is aimed at securing future raw‑material requirements and reducing input costs, although specific details were not disclosed.
Impact on Steel PSUs For SAIL, the move could help mitigate the 85‑90% import share of coking coal, mainly sourced from Australia and Mozambique. NMDC, which has traditionally focused on iron ore, is now looking to diversify into other minerals to meet the growing demand of the steel industry and beyond.
Broader Industry Context The import dependence is not unique to public sector units. JSW Steel, a leading private player, has already acquired coking coal assets overseas to achieve 50% of its raw‑material needs through captive sources. This trend underscores a broader industry push toward supply‑chain resilience.
Future Outlook NMDC’s chairman, Amitava Mukherjee, has set a target of deriving at least 20% of the company’s revenue from minerals other than iron ore by 2030. If the Ministry’s directive leads to successful overseas acquisitions, it could accelerate this diversification strategy and potentially lower input costs for the entire sector.
What to Watch - The pace and scale of overseas acquisitions by SAIL and NMDC. - Any changes in import bills for coking coal and limestone. - Policy developments that may facilitate or restrict foreign mining investments. - Market reactions to potential cost savings and supply‑chain stability.
The Steel Ministry’s push signals a strategic shift toward securing raw‑material supply chains and reducing import exposure for India’s steel industry.