Sojitz Corp, Japan’s third-biggest coal trader, aims to more than triple
Mongolian coal sales to China within three years as it seeks to handle 10
percent of the country’s growing sales of the mineral to the world’s top
consumer.

Sojitz, Japan’s sixth-biggest trading company, expects its acquisition of a
10 oercent stake in Mongolian resources and coal distributor-Inner Mongolia
Zhongmeng Coal Co, a unit of Inner Mongolia Erdos Group-to help boost its China
Sales, Masaaki Bito, Sojitz’s general manager, told Reuters.

Chinese firms are collectively the world’s largest spot buyer of thermal
coal, but their demand for coal has flagged in recent months due to an
oversupply of the fuel in Asia.

The Australian Newcastle coal spot index, the benchmark for Asia, has
dropped below $84 per tone, down 26 percent from the beginning of the year,
while Chinese domestic coal prices have slipped about 8.5 percent during the
same period.

While the bearish coal market is a concern, demand from China for Mongolian
coal is expected to pick up and may more than double in three years, Bito told
Reuters on Wednesday.

Sojitz is aiming to boost its Mongolian coal sales to China to 3 million to
5 million tones a year within three years. It now sells 1 million tones through
Zhongmeng, which has coal stockyards, trucks, washing plants at the border
atres between China and Mongolia and a key cross-border export license.

Sojitz, which is seeking a stake in Mongolian massive Tavan Tolgoi coal
deposit as part of a Japanese and South Korean consortium, expects China’s
demand for Mongolian coal to grow to 30 million to 50 million tones in three
years, up from 20 million last year.

Apart from Mongolian coal, Sojitz also sells 8 million tones a year
Australian coal, 7 million tones of Indonesian coal and 3 million tones of
Russian coal to Japan and other Asian countries, Bito said.

Bito shrugged off concerns about a possible move by Indonesia, the world’s
biggest thermal coal exporter, to curb coal export and tax shipments of the
mineral. Indonesia has so far steered clear of taxing coal export.

Bito said he expected coal to be eventually exempted from export restriction
and tax plans. Sojitz has an equity stake of 2.5 million tones of coal in
Indonesia.