Jindal Coal buys 50,000 tonnes per month from Australia, but will stop once its own mines reach capacity to ship in the second half of the year.
Jindal Steel, headed by billionaire lawmaker Naveen Jindal, gained access to 650 million tonnes of coking coal resources in October after buying a majority stake in Gujarat NRE Coking Coal, the Australian unit of Gujarat NRE Coke.
Gujarat NRE Coking's two mines, located in New South Wales, produce 1.5Mt per year and are expected to have an output of 5Mt by 2016.
Jindal Steel's coking coal consumption will more than double to 2.6Mt by 2016 as it expands capacity.
About 80% of the coal will come from its mines overseas and the rest will be bought from the open market.