Mongolia Plans to Boost Coal Exports to China by 20%
Coal Exports Targeted
Mongolia aims to increase coal exports to China by nearly 20% in 2023, strengthening energy cooperation between the neighbors.
Export Projections
The central Asian nation forecasts coal exports to reach 100 million tons by 2025, according to Prime Minister Oyun-Erdene Luvsannamsrai. A new cross-border rail link agreed upon on Friday will increase capacity by 30 million tons.
Target Capacity
Mongolia plans to establish additional rail connections to eventually double its coal export capacity to China to 165 million tons, up from the approximately 84 million tons exported in 2022.
Expanded Energy Cooperation
Mongolia seeks to collaborate with China and others across energy sectors, including green power generation, hydrogen production, and natural gas transit.
China's Coal Demand
China imported record coal volumes in 2022, with Australia and Mongolia contributing significantly. Mongolia accounted for 60% of China's coking coal imports for steelmaking.
Competitive Advantage
Despite struggles in China's steel industry and flattening coal demand, Mongolia is well-positioned to maintain or expand its market share by replacing Russian supplies that have become less cost-effective.
Power of Siberia 2 Pipeline
Mongolia intends to push for trilateral talks with China and Russia regarding the Power of Siberia 2 pipeline, a proposed gas conduit. The country is prepared to move forward if an agreement is reached.
Hydrogen Production
Mongolia is exploring hydrogen production using its coal reserves, seeing it as a future fuel for industries such as steelmaking. Talks are underway with Middle Eastern countries for potential hydrogen exports.
Upcoming Economic Indicators
February 19: Release of China's home prices for January.
February 20: China sets monthly loan prime rates.