On 20 February, the Fourth
international coal investors’
conference and exhibition, “Coal
Mongolia” 2014 started. Delegations
from all types of companies operating
in all areas of mining industry,
government policy makers, banking
and financing specialists, researchers,
a total of over 1000 participants from
some 10 countries are attending the
conference. Key agenda items of
the conference are Mongolia`s coal
industry`s development strategy,
competitiveness in the international
market, project financing, downstream
processing of coal (value-added
industrial production) and coking and
thermal coal projects.
Mongolian first mining portal
site Mining.mn is jointly organizing
the Conference for the fourth time
with the Mining Ministry to attract
investment in coal exploration,
production and processing projects in
Mongolia, to introduce government
policy on coal industry, to introduce
environmental-friendly, advanced
technique, practices and technologies,
to develop international cooperation,
and most importantly to increase the
competitiveness of Mongolia’s coal
industry.
Prime Minister N.Altankhuyag
gave a speech at the conference
opening. “Big goals and big works
are waiting for us. In the coming
years, some large scale projects will
be implemented in the coal sector
which has the capability to draw a
great amount of investment”, he said.
The Prime Minister highlighted that
Mongolia agreed with China to supply
1 billion tons of coal in the next 20
years and that it is a vital indicator
of the coal sector’s development in
the near future. Another big project
is to build a flammable gas producing
industry based on the brown coal
deposit. This industry, which requires
investment of USD 30 billion, will
process 50 million tons of coal that not
only enables Mongolia to provide its
domestic need of flammable gas, but
also to supply gas to China. A project
to produce fuel from coal has also
started. These projects benefit society
and the economy, including creating
a new source of energy, developing
industries and increasing employment,
said Prime Minister N.Altankhuyag.
The fourth conference is special as
it is being held soon after Mongolian
parliament passed the ‘State policy
on the mineral sector’ and the new
Investment Law. At the opening of
the conference, Mining Minister
D.Gankhuyag gave a presentation
‘The government policy in the mineral
sector and the strategic direction of
coal sector development’, noting
that government will encourage the
coal sector by supporting to build
value-added coal product processing
plants, power plants based on coal
deposits and to develop semi-coke
fuels and coal-chemical green field
projects. During the Mongolian Prime
Minister’s visit to China, the two
countries signed a memorandum that
Mongolia will export 1 billion tons
of coal to China in the next 20 years.
To implement this goal, the ministry
is working to export 50 million tons
of coal in recent years, said Minister
D.Gankhuyag. “Mongolia placed
second in its coal exports to China
in 2013. However, we supplied coal
for half the price of other countries”.
He said that the ministry was holding
talks with China, Japan, Korea and
other South East Asian countries about
possibilities to supply coal, and the
ministry with other relevant agencies
developed the ‘Coal’ program which
would be implemented in two stages
from 2014-2018 and 2019-2025.
According to the minister, the
coking coal price per ton exported to
China decreased in each of the last
three consecutive years. It was USD73
per ton in 2013, USD98.9 in 2012,
and USD100.6 in 2011. Meanwhile,
coal production grew annually while
the export amount of coal decreased.
Mongolia mined 33.3 million tons of
coal in 2013, of which 18.1 million
tons were exported. In 2012, coal
production was 31.9 million tons and
coal export was 20.4 million tons.
Therefore in 2013, the coal industry
was responsible for 27.7 percent
of State Budget revenues and 26.1
percent of total exports of the country.
Mongolia’s coal reserve estimates
stand at 173.3 billion tons and today
a total of 141 companies have 213
mining licenses and some 50 coal
mines run actively.
Reports by 30 presenters
representing the government,
investment community, technology
suppliers and researchers will be
heard and discussed during the two
day conference. At the beginning
of the conference, representatives
of government and state owned
companies including Minister of
Foreign affairs L.Bold, Finance
Minister Ch.Ulaan, CEO of ‘Erdenes
MGL’ LLC O.Sainbuyan, Department
head of Ministry of Environment
and Green development D.Enkhbat
made reports on government policies
to foreign investment, impact of
the coal sector on the government’s
budget, future trends of state-owned
companies in the coal sector and
environmental issues in coal mining.
While Mongolia sells its coal at a
low price, it spends more money and
time than its competitors for its coal
transportation as it is transported by
trucks. This issue was the focus of
discussions. Minister D.Gankhuyag
said that there is tendency that
economic importance is preferred
rather than strategic importance when
discussing railway gauge resolution
In his presentation ‘Investment in
coal mining and creating an attractive
environment for international trade’,
O.Chuluunbat, Vice Minister of
Economic development said that the
government set a goal to increase
coal exports reaching 30 million tons
in 2014 through solving problems of
paved roads, cross-border railway
and coal trade. He underlined high
costs and time-consuming coal
transportation as the most pressing
issues in the coal sector and said.
“Preparation work to transfer the paved
road between the Tavan Tolgoi deposit
to the Gashuunsukhait border station
to the ownership of ‘Erdenes MGL
LLC is underway. This action is taken
to coordinate coal transportation in a
united way to lower coal transportation
costs, and improve the financial ability
of coal companies. A tender to build
a 435 km paved road in the direction
of Tavan Tolgoi-Khanbogd-Khanghi
by concession was announced and
MCCC Company won the tender. We
also plan to put a cross border railway
into operation within the third quarter
of 2014’. According to Vice Minister
O.Chuluunbat, the government intends
to establish agreements with China
and other big coal buying countries
to sell coal sustainably for long term
and to set up a company in charge of
coal export trade covering companies
which run mining activities at the
Tavan Tolgoi deposit. In the future,
more coal export companies will be
involved.
G.Battsengel, CEO of MMC LLC,
which runs Ukhaa-Khutag coal mine
at the Tavan Tolgoi deposit expressed
the same view with vice minister
O.Chuluunbat that coal transportation
is one of key drivers to improve the
competitiveness of Mongolian coking
coal. He said that the short-term target
should focus on a cross-border railway
including gaining access to the Chinese
railway network and completing
the TT-GS railway which includes
resolving the gauge related decisions
and negotiating and agreeing transit
arrangements to access sea-ports
at Bohai-Rim including upgrading
Gashuun sukhait to an international
land-port as a mid-term target.
He also pointed out the importance
of value-added production, increase
pricing by offering products
with consistent quality matching
international benchmark and
customers’ requirements, and
reducing transportation costs by
increasing product value. He said
G.Battsengel, CEO of MMC LLC,
which runs Ukhaa-Khutag coal mine
at the Tavan Tolgoi deposit expressed
the same view with vice minister
O.Chuluunbat that coal transportation
is one of key drivers to improve the
competitiveness of Mongolian coking
coal. He said that the short-term target
should focus on a cross-border railway
including gaining access to the Chinese
railway network and completing
the TT-GS railway which includes
resolving the gauge related decisions
and negotiating and agreeing transit
arrangements to access sea-ports
at Bohai-Rim including upgrading
Gashuun sukhait to an international
land-port as a mid-term target.
He also pointed out the importance
of value-added production, increase
pricing by offering products
with consistent quality matching
international benchmark and
customers’ requirements, and
reducing transportation costs by
increasing product value. He said
There are over 60 companies
participating in the Coal Mongolia
2014 exhibition. Traditionally, at the
end of the conference, special awards
will be presented to the person of the
year in the coal sector of Mongolia,
the best mining company of the year
(exporter and domestic supplier),
the best coal miner and the best
exploration company.
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