India looks to advance into Mongolia to secure coking coal and critical minerals – like copper and rare earth elements – sidestepping the Chinese wall.
According to senior officials, joint working groups have been set up with the Mongolian embassy to explore the possibility of collaborating with this land-locked Central Asian nation. However, the evacuation of minerals continue to be the area of concern, specially when most of the alternatives are being routed through China.
India is apparently unwilling to route its evacuation processes through China in any manner. Alternative routes through Russia are being explored, multiple officials aware of the on-going discussions told businessline.
One option proposed include having a consortium of State-run companies – that are into coal mining, mineral processing and other required infra-related areas – to come together and explore the possibility of setting up the required evacuation infrastructure.
Proposals Given
Officials from the Mongolian embassy and the government there have already reached out to at least two Ministries – Steel and Mines– here with “proposals”.
According to one of the officials, the coking coal supply has been an area that has been under discussion for some time now; and a proposal was discussed last year.
A key feedstock material in steel-making, India – the second largest steel-maker globally – is dependent on coking coal imports primarily from Australia, the USA and Russia.
It is being said, Mongolia is building a washing station for coking coal – with a 2024 deadline – and it could help export coking coal here. Joint venture tie-ups could also be explored.
Similarly, the Mines ministry was keen to tap into Mongolia for copper resources whereby it was looking at investments in mining activities and other options including ownership and off-take agreements.
“So we are looking at ways to collaborate with Mongolia, but then the mandate is also to avoid dealing with China directly. Work is on with the joint working group to discuss alternatives,” the official said.
New Routes Under Discussion
Evacuation routes under discussion include using the Far East corridor using the Vladivostok port to Chenna; and the second was using International North South Transport Corridor while tapping into the Chabahar port. While the third route, which uses the Russia – Mongolia – China economic corridor.
The International North – South Transport Corridor (INSTC) is a multi-modal transport project that spans over 7,200 kms 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 2,000 and ratified in 2002 (by India, Iran and Russia).
On the other hand, India and Russia are both keen to operationalise the Vladivostok – Chennai shipping route.
Mongolia is a land-locked country, so any movement of coal or minerals from there has to be via its neighbouring countries of Russia or China. Officials in the know said, Russia has already allowed Mongolia to use its transportation infrastructure to allow shipping of coal and copper to Asia – Pacific markets. Mongolia reportedly has access to Vladivostok port in Russia.
