India plans to establish a consortium of state-backed enterprises to boost and diversify coking coal imports, helping local steelmakers tackle the shortage of key steel-making raw material, Reuters reported citing two government sources.

India's major steel companies had petitioned the government to increase the supply of coking coal. This was mainly attributed to reduced coking coal supplies and rising prices.

Indian steel companies consumed about 70 million tonnes of coking coal per annum, of which imports took up about 85% of the total demand.

Steel mills struggled with fluctuations in Australian coking coal supplies, which typically accounted for over 50% of the country's annual imports. India also imported coking coal from the United States, Indonesia and Canada.

Sources said the consortium would negotiate favorable prices of coking coal by reaching out to suppliers in different countries including Australia, and ultimately sell the imported raw materials to local steel mills.

Sources also noted that India would purchase more cost-effective coking coal from Russia to make up for sporadic supplies from Australia.

Indian government will soon formally resume talks with Mongolia over the purchase of coking coal ahead of the formation of the consortium, which boasted abundant mineral resources. But a viable shipments route to India has not been found.

(Writing by yan.sun  Editing by Harry Huo)
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