President blamed for coal export delays

B.Erdenechimeg

2017-09-11 14:25 GMT+8

ULAANBAATAR (GoGo Mongolia) - On Sep 7-8, mining and coal entrepreneurs gathered at Shangri-La Hotel Ulaanbaatar for the 7th annual Coal Mongolia conference and discussed the coal sector issues. 

The vast majority of Mongolia`s export income comes from copper and coal sales. The country`s estimated coal reserves are 173 billion tons. 

More coal exploration was done in Central and Eastern regions than in Western regions. It is clear that the coal reserves of the country to increase if exploration will be conducted in the West. 

Currently, a total of 242 licenses have issued and 82 mines are operating in the coal sector. The main feature of this sector is that the main players are domestic companies. Therefore, most of the revenues from coal stay in Mongolia, not transferred to another country. In other words, this sector has few foreign investors. 

Two special events have been concluded with this year's conference. First, coking coal prices have risen in China as major miners` profit went up. However, China tightened its border inspection. Second, Ministers of Mining and Heavy Industries as well as Energy did not attend the conference due to the resignation of Prime Minister J.Erdenebat and his government. Deputy Ministries came to the conference.

In late August, China intensified its check on trucks passing the Gashuun Sukhait border port and extended the time for the examination. Thus, a 70-km long truck line was formed at the Gashuun Sukhait port. The reason for this was explained by the fact that truck drivers are often caught up in smuggling goods such as animal products.

However, conference attendees considered that is a decision of the Beijing and related to politics. On the other hand, Ambassador to Mongolia from China has not attended the Coal Mongolia for the first time this year. Moreover, delegations of Chinese state-owned coal firms, Chalco and Shenhua said that they could not attend the conference due to visa issues. 

On the other hand, Mongolia has taken all possible measures to increase the capacity of the Gashuun Sukhait port by adding the number of employees and improving their work environment. However, President of Mongolia Kh.Battulga has contacted the representative of Dalai Lama and talked about cooperating with India in the defense sector, making Beijing angry. Therefore, China decides to decrease the amount of coking coal. 

Last spring, coking coal price went up to USD 300 in Australia. Following coking coal price have risen in Mongolia. Authorities increased the coal sales revenue to the state budget, setting at 220 billion MNT. However, due to the long line formed at the border with China, the country expects to have a budget deficit. 

Deputy Minister of Road and Transportation B.Tsogtgerel noted that measures are being taken to solve the problem raised at the border crossing with China. Thus, the first must do homework for the new Minister of Foreign Affairs is to calm Beijing and increase the number of trucks loaded with coal. 

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