India-Mongolia to set shipping route for coking coal supply

Subject : International Relations

Section: Places in news

Key Points:

Discussions are ongoing between the two countries to decide on a shipping route for coking coal import from Mongolia. Coking coal is a key feedstock material for steel-making.
The two probable shipping routes for the transport are:
- Far East corridor that uses the Vladivostok – Chennai shipping path
- International North South Transport Corridor (INSTC) through use of Chabahar port.
A third route, which uses the Russia -Mongolia-China economic corridor, was dropped from consideration.
The trade arrangement is significant considering that Mongolia is a landlocked country bordered by just two countries, Russia to the north and China to the south.

Coking coal:

Coking Coal is being imported by Steel Authority of India Limited (SAIL) and other Steel manufacturing units mainly to bridge the gap between the requirement and indigenous availability and to improve the quality. Coal based power plants, cement plants, captive power plants, sponge iron plants, industrial consumers and coal traders are importing non-coking coal.
Coke is imported mainly by Pig-Iron manufacturers and Iron & Steel sector consumers using mini-blast furnace.
According to National Steel Policy 2017, to achieve steelmaking capacity of 300 MTPA (including 180 MTPA through Blast Furnace route) by 2030, ~170 MT coking coal will be required by 2030.
Government has launched Coking Coal Mission to meet the demand of domestic coking coal as projected by the Ministry of Steel and has set target for raw coking Coal production by 2030

International North-South Transport Corridor (INSTC)

The International North-South Transport Corridor (INSTC) is a multi-modal transport project that spans over 7,200 km and aims at easing cargo movement among Afghanistan, Armenia, Azerbaijan, Russia, Central Asia, Europe, India and Iran.
In December 2016, India agreed to use the INSTC which was established in 2000 and ratified in 2002 (by India, Iran and Russia).

Far East corridor

India and Russia are both keen to operationalise the Vladivostok-Chennai shipping route of 10,500 km.
This will substantially cut the distance/time taken compared to the existing route from St. Petersburg to Mumbai, that passes through the Mediterranean.
The Chennai-Vladivostok maritime trade corridor is expected to cover the Sea of Japan, East and the South China Sea through Malacca Strait to reach the Bay of Bengal.