Iron Ore, Coking Coal and Raw Material Supply

Steelmakers need iron ore, mostly from eastern India, and coking coal, much of which is imported, so raw material supply is a key strategic issue.

Steel begins with what comes out of the ground.

Iron ore

India has large iron ore deposits in Odisha, Jharkhand, Chhattisgarh and Karnataka. NMDC, a state company, is a major miner, and private firms also mine under leases.

Coking coal

The quality of coal needed for blast furnaces is scarce in India, so a large share is imported from countries such as Australia. Price swings abroad hit Indian mills.

Mining policy

Auctions, royalties and export duties on ore all change the profit of miners and steelmakers.

Captive mines

Owning mines gives a steelmaker more stable input costs, which is a big competitive advantage.

An import shock

If coking coal prices double overseas, blast-furnace plants see costs jump within months.

Thinking India has all raw materials for steel

Coking coal is a notable exception.

Key takeaways

Ore comes mainly from the east.
Coking coal is largely imported.
Mining policy affects steel costs.
Owning mines protects against price shocks.