State owned Erdenes Tavantolgoi LLC has resumed coal export to China after a three month stand-off on April 22nd.  The company suspended coal deliveries to China last January amid a cash crunch after failing to pay its logistic company, Altangobi, its provider of warehousing services at the border with China.

The halt came as Erdenes Tavantolgoi LLC sought a government loan for as much as 500 million US dollars to repay debts and fund infrastructure construction. The mining company also wanted to raise prices and cut shipments, changing the terms of the 250 million US dollar contract it signed in July 2011 to supply companies including Chalco, the Aluminum Corporation of China Limited.

Prime Minister Norov Altankhuyag said the country will begin coal export to China next week according to a press statement last Friday.

Erdenes Tavantolgoi announced on Monday “The State owned company is now able to begin shipments of coal with lower loss after several measures to reduce expenses. The Government is continuing negotiations with Chalco on issues to change the terms of the coal export agreement so the price per ton of coal shipment is not yet decided.”

Erdenes Tavantolgoi began shipments of coal to China in August 2011 and has exported 2.7 million tons of coal since then. 

Officials say if the Government solves the customs problems it would encourage more earnings from coal exports. According to Mongolian experts, the country”s geological coal reserves are about 173.3 billion tons. There are more than 300 coal mines in 15 regions, ranking Mongolia in the world”s top 10 coal producers.