Category
- Agriculture
- Automobiles and Machinery
- Bank, non banking financing, investment
- Blasting
- Construction
- Consumables
- Education
- Energy
- Engineer , Architecture and Geodesy
- Finance, Audit,Accounting and Brokerage
- Food
- Foreign Trade
- Geology Exploration
- Health
- Information Technology
- Insurance
- Labor Safety
- Legal and Business consulting
- Lighting
- Mining equipment
- Mining Services
- Other product and service
- Road
- Sewing and textile products
- Transportations
- Travel
Events
Mongolia eyes ramp-up of coking coal, copper exports to China in 2022: minister www.hellenicshippingnews.com
Mongolia is ramping up its efforts to supply raw material such as coking coal and copper to China in 2022 after a lackluster trade in 2021, as it expands its mining sector and boosts its transport network, said Batnairamdal Otgonshar, Vice-Minister at Mongolia’s Mining and Heavy Industry Ministry.
Mongolia is a key metallurgical coal and copper concentrates suppliers to China, with most of the trade happening through trucks. Mongolian truck suppliers in 2021 faced severe logistics issues in hauling shipments from land ports to China due to the pandemic-led restrictions at border crossings.
Mongolia is looking to launch three railway lines this year, which will bring the country’s mining sector to a whole new level, Otgonshar said in an interview with S&P Global Commodity Insights.
Railway shipments will be much convenient, cost-effective, and safer with less human contact amid COVID-19 border restrictions compared to trucks, once the rail networks come online, Otgonshar said.
Suppliers will use the new railway lines to ship coking coal and copper concentrates.
The Tavantolgoi-Gashuunsukhait railway line will come online in July, with 75% of the project complete so far, the minister said.
Meanwhile, construction on Zuunbayan-Khangi/Mandal railway lines started in March, and the country is aiming to start their operations later this year, Otgonshar said.
Copper concentrates
Transportation of Mongolia’s Erdenet copper concentrate through China’s Erenhot rail port was disrupted through December 2021 to January, due to China’s zero-COVID control policy.
Mongolian government is watching the logistics issue closely, Otgonshar said.
Despite transportation challenges, Mongolia still managed to export 335,000 mt of copper concentrates to China in the first quarter of this year, already meeting 25.6% of its annual target, he said.
Mongolia would just focus on China market as transportation costs for other markets are very high, and China’s market is big enough to absorb Mongolia’s increasing production, the minister added.
Copper concentrate from the Oyu Tolgoi mine was sold to Japanese and Korean smelters previously as a trial, according to market sources.
Mongolia exported 1.2 million mt of copper concentrates to China in 2021, accounting for 5.1% of China’s copper concentrate purchases, the minister said.
Mongolia is advancing its mining industry capabilities and the country has the potential to become the world’s fifth-largest copper player by 2030, Otgonshar said.
This is expected to happen following a major ramp-up of the Oyu Tolgoi mine, as full production is expected to reach in the next few years, Otgonshar added.
Oyu Tolgoi, in the South Gobi region of Mongolia, is one of the largest known copper and gold deposits in the world and it is expected to be the world’s fourth largest copper mine.
Mongolia has developed skills in running mines over the past 30 years and now it is time to move to the next level, going to more value-added processing, Otgonshar said.
The government is planning to build up a copper smelter in Erdenet mine by 2025-2026 while another copper smelter at the Oyu Tolgoi mine is also under discussion, the minister said.
Overcoming past hurdles, the Mongolian government reached an agreement with Rio Tinto and Oyu Tolgoi in January to commence underground mining operation.
As the government and Rio Tinto has resolved binding constraints, they can focus on production, processing concentrates, and produce more value-added products, Otgonshar said.
Oyu Tolgoi is expected to produce around 500,000 mt of copper per year on an average from 2028 to 2036 from the open pit and underground operations, according to Rio Tinto. An average of around 350,000 mt of copper is expected to be produced from the operations for further five years. The mine produced 163,000 mt in 2021.
Coking coal
China’s coking coal supplies were strained last year at a time of huge demand as Mongolian supplies struggled due to border restrictions.
Meanwhile, shipments from Australia — China’s traditional coal supplier — remained largely absent in 2021 due to an unofficial ban, sparking volatility in coking coal prices for most part of the year.
Platts assessed premium low-vol hard coking coal CFR China more than doubled to $615/mt in October 2021 from January 2021 level, according to S&P Global Commodity Insights data.
Given the price increase in coking coal, it shows more demand for the product in China, Otgonshar said.
Mongolia is aiming to make a big comeback in China’s coking coal markets in 2022.
There was enough demand for Mongolia’s coking coal from China and many buyers showed increasing interests to buy more coking coal and thermal coal, even though the border challenge issues remained, Otgonshar said.
Mongolia is ready to export as much as they could to meet the demand in China, and hopefully the border issues will improve over the time, the minister added.
Transportation of Mongolian coking coal to China slowed down significantly from more than 2,000 trucks per day in 2020 to current 200-300 trucks per day.
Mongolia is looking to export 36.7 million mt of coking coal to China this year, Otgonshar said.
If realized, Mongolian shipments in 2022 would post a 161% jump from 2021 level. The country exported 14.04 million mt of coking coal to China in 2021, accounting for a quarter of China’s total imports.
Published Date:2022-04-13
