Mongolia – Mongolian infrastructure issues obstruct coal exports to China
Location: Ulaanbaatar – Mongolia
Restrictions: A24 Clients
Another major challenge facing China since the global pandemic began was the shortage of coal. This is a test of the country’s economic potential and its ability to run its domestic coal mines at full capacity. In October 2020, Chinese state-owned companies’ decision to suspend Australian coal imports was seen as a response to Australia’s more critical approach to China. Australia’s coal restrictions are creating new opportunities for the rest of the region, especially in East Asia and Northeast Asia, to make up for China’s coal shortages. China has stepped up its efforts to involve Russia, Mongolia, and other third parties to make up for its coal shortages. However, Mongolia, China’s largest coal supplier in northwestern China, has seen a 50 percent decline in the past two years due to its inability to fully address its coal export infrastructure problems. China, which relies heavily on coal, is the world’s largest emitter of greenhouse gases, producing more than 53 percent of the world’s total coal-generated power in 2020, according to Climate Group Amber.
(SOUNDBITE): J.Zoljargal, Executive Director of the Mongolian Coal Association
“I would not call the energy crisis in China a crisis,” he said. This is due to temporary logistics and logistical problems related to Covid and various international trade crises. As a result of these problems, some power plants are failing to operate at full capacity in some parts of the Chinese region. About 1 billion tons coking coal is used worldwide. Of this, China uses a total of 500 million tons. China imports more than 10 percent of its coal, or more than 70 million tons, from abroad. Mongolia supplies about 3/1 of this over 70 million tons of coal. At most, we supplied 50 percent of that number. So Mongolia is a big supplier. Second, China produces more than 400 million tons on its own and imports the rest. They have a lot of potentials, and if foreign coal exports stop in any way, they will be able to solve their problems on their own. However, there are problems with the quality and price of Chinese domestic coal. In order not to create excessive shortages and increase prices, on the other hand, it is necessary to keep foreign trade in order not to become too dependent on imports.
(SOUNDBITE): B. Elbegzaya, Head of the Policy Implementation Coordination Department, Ministry of Mining and Heavy Industry)
“The Government of Mongolia and the Ministry of Mining and Heavy Industry have jointly built a container terminal to reduce human involvement and people-to-people contacts in connection with coal exports. The work at Shivee Khuren port is about 80 percent complete. A 30-hectare container terminal has been built at Gashuun Sukhait port. It was built with the resources of Energy Resources, Erdenes Tavan Tolgoi, and the local Tavan Tolgoi company and handed over to the Port Authority. This means that the container can be lifted with minimal human intervention to suit the epidemic situation. Established with the capacity to transport one driver and one car 2-3 times a day. We are discussing with the Chinese side the possibility of transporting 100 cars three times a day.