Steel Ministry asks SAIL, NMDC to scout overseas mineral assets for raw material security

The Steel Ministry has asked state-run steelmakers SAIL and NMDC to explore mineral assets overseas as India looks to secure long-term supplies of key raw materials and contain input costs, a senior ministry official said.

The official confirmed that Steel Authority of India Ltd (SAIL), the country's largest public sector steelmaker, and NMDC, India's leading iron ore producer, have been asked to look for mining opportunities abroad.

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The move is aimed at securing future raw material requirements and reducing costs, the official said, without providing further details.

Iron ore and coking coal are among the key raw materials used in steelmaking, along with limestone and pulverised coal injection (PCI) coal.

While India has abundant iron ore reserves, domestic steelmakers, including SAIL, remain heavily dependent on imports to meet their coking coal requirements. Around 85-90% of India's coking coal needs are met through imports from countries such as Australia and Mozambique.

Indian steelmakers also import limestone, including from the West Asia region.

The push for overseas assets comes as steel companies look to gain greater control over their raw material supplies and reduce exposure to volatile international prices.

Private sector steelmaker JSW Steel has also acquired coking coal assets overseas as part of its strategy to meet 50% of its raw material requirements through captive sources.

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For NMDC, the overseas push could also fit into its broader strategy of diversifying its mineral portfolio.

The company, which is primarily focused on iron ore production, is looking to expand into the exploration and production of other minerals to meet the growing requirements of industries, including steel.

NMDC Chairman Amitava Mukherjee recently said that by 2030, his goal is to earn at least 20% of the company's revenues from the sale of minerals other than iron ore.

For India, securing mineral resources abroad could give steel producers greater visibility over supplies while helping them manage one of the biggest components of their production costs.