The main restraint of Mongolian coal exports is lack of infrastructure for rising demand, not the epidemic flare-ups, Zoljargal Jargalsaikhan, executive director of Mongolian Coal Association, said in a remote video at an industry summit on September 22.
Coal-rich Mongolia could export 50 million tonnes of coking coal annually under the current infrastructure condition, with its long-term and stable trade partnership with China and Asia as well as advantages of low depth of coal seam and low cost at opencast mines, Zoljargal Jargalsaikhan said.
However, a “blackhole” has been existing in coal transport between the two countries for a long time, he pointed out.
The rapid hike of short-haul trucking rates (Tsagaan Khad to Ganqimaodu) to $300/t in 2021 from $50/t in 2020 has pushed the total cost of coal produced in Tavan Tolgoi to China surging to $400/t from $160/t.
This “blackhole” has stolen incomes for Mongolia, and kept the new Chinese coal buyers out of business and created undesirable condition in coal trade between China and Mongolia.
So, what has really restricted China-Mongolia coal trades is infrastructure issue but not the COVID epidemic, and a further boost to infrastructures could help tackle the problem, he said.
He introduced three railways are currently under construction: Tavan Tolgoi-Gashuunsukhait (239 Km), Tavan Tolgoi-Zuunbayan (416 Km) and Zuunbayan-Khangi (226 Km).
Two roads are under construction: Tavan Tolgoi-Gashuunsukhait and Tavan Tolgoi-Khangi, with annual transport capacity of 48 million and 20-25 million tonnes, respectively.
Two railways are in planning: Artssuuri-Nariinsukhait-Shiveekhuren (1,255 Km) and Choibalsan-Khuut-Bichigt (384 Km). And coal rail container stations will be built at two major border crossings.
Mongolia plans to double cargo delivering capacity to more than 200 million tonnes at border crossings in the next few years, and potential coal exports will be around 50 million tonnes each year.
Note: This article has been exchanged under the article exchange agreement between CoalMint and Sxcoal.
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