Why India Is Sending SAIL and NMDC to Buy Mines Overseas

India consumes roughly 175 million tonnes of coking coal a year. It produces about 20 million tonnes at home. That gap, nearly nine out of every ten tonnes bought from abroad, is the structural reality behind a decision that landed this month.

In early October 2026, India’s Ministry of Steel directed two state-owned giants, Steel Authority of India Ltd (SAIL) and NMDC Ltd, to hunt for mining assets overseas. The move is not an isolated policy event. It is the latest expression of a decade-long tension between India’s ambition to reach 300 million tonnes of steel capacity by 2030 and its near-total dependence on imported coking coal, estimated at 89-95% of demand. JSW Steel’s earlier move into Australian coking coal adds a competitive edge, pushing the state sector to respond.

This analysis maps what the directive actually means for capital allocation. Here is which jurisdictions are likely to attract Indian state money, what each public-sector enterprise is really chasing, and what the precedents from China, Japan and South Korea suggest about where this strategy succeeds and where it fails.

The structural trap driving India’s overseas mining push

Start with the arithmetic, because the scale of it does most of the explaining. According to Argus Media (September 2026), India consumes around 175 million tonnes of coking coal annually and produces only about 20 million tonnes at home. That implies roughly 89% import dependence, among the highest of any major steel-producing nation.

The obvious question is why domestic production cannot simply be ramped up to close the gap. The answer is quality and reserve depth, not just volume. Research from Ken Research found that usable domestic metallurgical coal met barely 6% of India’s blast-furnace and basic-oxygen-furnace (BF-BOF) requirement in FY25, leaving the remaining 94% to be sourced overseas. India has the coal; it does not have enough coal of the grade a modern blast furnace needs.

The policy posture behind the October directive crystallised earlier in 2026 when India formalised the coking coal critical mineral classification, a designation that elevated supply security to the same strategic tier as lithium and cobalt and gave the Ministry of Steel political cover to deploy state capital abroad.

Here is where the trap tightens. India wants to lift steel capacity to 300 million tonnes by 2030, a target cited across EY, Argus Media and S&P Global analyses. More steel means more coking coal, and because the domestic supply cannot keep pace on quality, almost all of that incremental demand has to be imported.

S&P Global projection: India’s coking-coal imports are forecast to rise from 64 million tonnes in 2025 to 153 million tonnes by 2035.

That trajectory is the heart of the matter. The import-dependency figures tell you that India is not buying optionality with this directive. It is responding to a deficit that gets worse, not better, as capacity expands, which means the acquisition pipeline will likely be larger and longer-lived than a typical commodity-cycle hedge.

For context on where the dependence sits today, the supplier breakdown for the first eight months of 2025 shows how concentrated the exposure remains.

Source: S&P Global data via The Hindu Business Line, January-August 2025 (total 54.5 Mt). Nearly half of India’s coking coal still comes from a single country, and that concentration is precisely what the directive is designed to unwind.

What SAIL and NMDC are actually being asked to do

Begin with what the directive does not say, because the omissions matter. When the Ministry of Steel issued its instruction in early October 2026, a senior official confirmed both public-sector units had been asked to scout overseas mineral assets. No commodity list was disclosed. No target countries were named. No binding timeline was attached.

So the realistic shape of execution has to be read from the corporate strategies already in motion, and NMDC’s is the clearest guide. Chairman and Managing Director Amitava Mukherjee has set a target of generating at least 20% of total revenue from minerals other than iron ore by 2030, with at least 10% coming from international operations in the medium term.

That is a considerable distance to travel. NMDC currently derives roughly 99% of its revenue from iron ore. The directive, then, is consistent with where the company already said it was heading rather than a sudden change of course.

The NMDC diversification strategy predates the October directive by months, with Chairman Mukherjee having already committed publicly to bringing non-iron-ore revenue above 20% by 2030, which means the Ministry’s instruction lands on a company that has the internal mandate but not yet the executed transactions to back it up.

In a June 2025 interview with Outlook Business, Mukherjee named the minerals NMDC is prioritising:

• Lithium
• Copper
• Gold
• Cobalt
• Nickel
• Coking coal
• Iron ore
• SMS-grade limestone
• Dolomite
• Bauxite

That breadth tells you NMDC is positioning as a diversified critical-minerals player, not just a coking-coal buyer. S&P Global (May 2025) notes the company has been evaluating assets in Indonesia and Australia, with African nations and Latin America also flagged as exploration regions. The gap between near-100% iron-ore concentration today and the 2030 diversification target is both the ambition and the execution distance you should factor into any assessment of how fast this directive produces tangible assets.

JSW Steel’s Illawarra stake as the private-sector benchmark

The private sector has already shown what partial self-help looks like. JSW Steel acquired a stake in the Illawarra coking-coal operation in Australia in 2024, a deal confirmed by S&P Global, as part of an internal goal to meet 50% of its raw-material needs through captive, company-owned sources.

S&P Global frames this as a model of securing a portion of supply through equity while continuing to rely on diversified imports for the rest. That is the benchmark against which India’s state enterprises will be judged. Mapping what each entity is chasing, NMDC across a basket of critical minerals and SAIL primarily for coking-coal security, helps you identify which resource jurisdictions are most likely to see Indian state bid interest first.

Competing frameworks for how India should proceed

Here is the part that gets lost in the headlines. The expert consensus is not a ringing endorsement of state-led overseas buying. It is a genuine debate between four distinct strategies, and the Ministry’s directive sits at just one end of that spectrum.

S&P Global’s ferrous analysis sets out a multi-pronged approach, and it pointedly does not treat overseas acquisition as a standalone fix. The four strands are:

1. Overseas equity acquisition by both public-sector units and private firms, to secure captive supply.
2. Domestic resource development and beneficiation, lifting the yield and quality of India’s own metallurgical coal.
3. Contractual diversification, spreading long-term supply agreements across more supplier countries.
4. Financial hedging and technology, including blend optimisation, washery upgrades and lower-carbon steelmaking routes.

EY sharpens the fourth point. Its coking-coal decarbonisation work argues that securing supply and decarbonising it are inseparable from hitting the 300 Mt capacity target, and that a purely supply-side acquisition strategy misses the downstream technology layer entirely. That is the part the Ministry directive, focused on buying mines, does not address.

There is also a feasibility check on the domestic-first camp. The Ken Research finding that domestic supply met only 6% of BF-BOF requirements in FY25 tells you that domestic development alone cannot carry the load in any realistic timeframe. It is part of the solution, not the whole of it.

Then there is the energy-transition warning, which deserves to sit in plain view.

The Hindu Business Line frames the financial difficulties of Australian coal miners as “a warning for India,” arguing that heavy investment in coal equity could become loss-making or stranded if global demand slows or decarbonisation accelerates faster than expected.

That risk is most acute for long-life coking-coal projects, exactly the kind of asset a state buyer might lock into for decades. JSW Steel’s partial-captive model, roughly 40-50% owned with the balance from diversified traded supply, is the middle ground analysts tend to find more efficient than either extreme.

The debate tells you the directive is a directional signal, not a strategic blueprint. The quality of individual project selection and commercial discipline will decide whether India’s public-sector units build durable supply security or repeat the overpayment errors of China’s boom-era acquisition spree. The intent is set; the selection criteria are not, and that gap is where project-level risk concentrates.

Where Indian state capital is most likely to flow, and what it signals for global supply

Follow the money, and a shortlist of jurisdictions emerges. NMDC’s confirmed evaluation activity points to Indonesia, Australia, Africa and Latin America. India’s existing import trend reinforces the same map, with Mozambique climbing sharply, Russia gaining in PCI coal, and Canada growing.

SAIL’s mandate is narrower and tied directly to coking coal, which steers attention toward the suppliers where Indian volumes are rising fastest. Mozambique is the standout. Imports reached 3.5 million tonnes in FY2024-25, up from 2.2 million tonnes the prior year, valued at roughly Rs56.2 billion, according to the Financial Express (February 2026). Analysts cited by Kitco (September 2026) suggest Mozambique could overtake the US and Russia to become India’s second-largest coking-coal supplier.

JSW Steel’s Mozambique position extends beyond the Illawarra stake that set the private-sector benchmark, with the company separately securing the Minas de Revuboè coking coal project, a move that reinforces why Mozambique is the jurisdiction analysts expect Indian state capital to chase most urgently.

The flip side is risk. New concentration in Mozambique brings governance and logistics uncertainty that mature Australian supply chains do not carry, and that trade-off belongs in any assessment of sovereign-counterparty exposure in the region.

The following comparison shows where the volumes and the acquisition interest currently line up.

Sources: S&P Global Platts, Financial Express, The Hindu Business Line, Kitco.

India’s demand is already redrawing the trade map. Argus Media characterises the country’s steel-capacity growth as “redrawing global coal and coke trade.” Monthly data from May 2026 showed total imports of 8.26 million tonnes, up 13% year on year, with Australian volumes alone jumping around 60% to 4.37 million tonnes for that single month, a reminder that diversification runs alongside, not instead of, continued Australian reliance.

What Australia’s declining share reveals about the new trade map

Australia remains the single largest supplier, but its share is structurally declining, not just cycling. Full-year 2024 exports to India came in at 25.84 million tonnes, about 11% below 2023 and roughly 20% below 2022 levels, per S&P Global Platts (May 2025).

That is a durable shift in the trade map rather than a passing dip. For commodity investors, the signal is that Mozambique, Indonesia and parts of Africa are entering a period of elevated Indian institutional demand. The opportunity is real, and so is the new concentration risk in jurisdictions that lack Australia’s infrastructure and governance maturity. Knowing which markets are most likely to see Indian state capital competing for assets gives you actionable context for deal premiums and sovereign-counterparty risk over the next three to five years.

What the directive changes, and what it does not

Strip away the noise and one genuine shift stands out. India’s government has stopped treating import dependence as a market condition to be managed and started treating it as a national-security and industrial-competitiveness problem that warrants state capital. That is a change of posture, and it is durable.

What the directive changes:

• Policy posture, from accepting import reliance to actively deploying state capital against it.
• A mandate for PSU international activity, formalising overseas acquisition as a core task for SAIL and NMDC.
• Competitive urgency, sharpened by JSW Steel’s private-sector precedent in Australia.

What it does not change:

• The structural domestic supply deficit, which S&P Global projects will push imports toward 153 million tonnes by 2035.
• The need for commercial discipline in project selection, where the real risk sits.

The execution distance is considerable. NMDC still earns roughly 99% of revenue from iron ore against a 20% non-iron-ore target for 2030, and no signed joint ventures or named acquisitions had been confirmed in public reporting as of early October 2026. The international lesson is concise: Japan and South Korea’s disciplined minority-stake-plus-contract model outperformed China’s boom-era equity concentration, and India’s PSUs face the same choice.

The international lesson the current article draws from Japan, South Korea and China’s contrasting records is consistent with what investor accountability frameworks now demand: minority stakes with clear off-take terms have consistently outperformed control-seeking equity concentration when commodity cycles turn, making mining acquisition discipline the single most consequential variable in any PSU overseas programme.

For investors, this marks the start of a multi-year capital-deployment cycle, not a near-term deal-flow event. Understanding the gap between policy signal and operational delivery helps you avoid overpaying for near-term premiums while staying positioned for the structural demand pressure India’s coking-coal deficit will keep exerting on global supply.

This article is for informational purposes only and should not be considered financial advice. Investors should conduct their own research and consult with financial professionals before making investment decisions. Past performance does not guarantee future results. Financial projections are subject to market conditions and various risk factors, and forward-looking statements are speculative and subject to change based on market developments.