Seddorj: Coal price is likely to rise in the global market www.zgm.mn
Coal export revenue had declined significantly after the specific restrictions had been made by the Government in an effort of preventing coronavirus outbreak, such as closing the borders and halting coal export temporarily. However, coal export is now resumed, allowing the exporter companies to produce normally. Serdorj Renchinbyamba, Chief Executive of Tavan Tolgoi JSC, talked about the industry’s challenges and outlook.
-Coal export had resumed and companies are exporting coal through the Gashuunsukhait port as usual. How much coal is Tavan Tolgoi JSC exporting daily?
-Well, approximately 40-60 coal trucks are in container transportation, transporting coal from Tsagaan Khad. There are about 720,000 tons of coal in stock as well as 600,000 tons of coal that is ready to be mined. Consumers are not fully satisfied with the lack of coal transportation through the border. Even though the container transportation has started, drivers are on the brink of unemployment as the normal coal trucks are not in operation.
-How are the economic consequences measured?
-If the situation stays the same, we will be in a critical condition economically. Currently, we are hoping the situation at the Gashuunsukhait port and China’s construction to be changed. However, Tavan Tolgoi is operating normally.
-How did Chinese coal importer companies respond to the current situation?
-The Chinese side is waiting for he export output and transportation conditions to get better. Four of the companies that have signed an agreement with us are working as normal. Those companies have paid the down payment in line with the contract. To that extent, it is our duty to export coal. Other consumers have halted their consumption, so we are in a waiting situation.
-Did the decision to halt coal export affect the company’s export target?
-Tavan Tolgoi JSC planned to export 6 million tons of coal this year but it was interrupted. In 2019, the company’s sales revenue reached MNT 263 billion, mined 2.2 million tons of coal, and exported 1.9 million tons of coal with a net profit of MNT 48 billion. The shareholders’ meeting will be held online on April 29. Over 51 percent of the company’s dividends contribute to the budget of Umnugobi province. People from 23 countries, mostly from Mongolia, own 49 percent of Tavan Tolgoi’s stake.
-Is there any projection of Mongolia’s coking coal demand to increase in China’s market?
-There is a difference between the selling price of the mine and the global market price. World market prices and steel production are also expected to increase. So, that means we can hope for it.
Published Date:2020-04-12