‘The steady increase of Mongolia’s coking coal output will keep supporting the country’s coal exports, but the transportation bottleneck will likely remain over the near term,’ said Xiao Jiahua, Deputy General Manager of the Energy Sources Business Centre at the China Aluminum International Trading Company.

The huge Tavan Tolgoi open-pit mine in Mongolia’s South Gobi (Umnugobi) province is the country’s largest coking coal operation, with production dominating Mongolia’s coking coal output. The mine’s total run-of-mine coal resource is estimated at 7.4 billion tonnes of which over 73 percent is coking coal.

Over the years, Mongolia’s coking coal exports to China have increased significantly. It is a very influential industry for the economy.

Mongolia’s coking coal exports are largely raw and unwashed coking coal, which reduces the realized price significantly, compared to Australia, where coal exports are washed and managed with extensive blending controls.

The distance from coking coal mine complex to the Mongolia-China border at Ganqimaodu is estimated to be around 240-250 km. However, efforts are being made to improve logistics and transportation. Tavan Tolgoi to Ganqimaodu railway link is expected to be completed in 2021 and the Trans-Mongolian Railway is being expanded to increase coal throughput volume to 34 million mt/year by 2020.

Almost all of Mongolia’s coking coal is exported to China, which imported 64.2 million mt of coking coal in 2018 of which Mongolian coal imports accounted for 43% of the total volumes. From January-July 2019, China imported 44 million mt of coking coal with 43% of imports coming from Mongolia.