Tuesday, June 21, 2011

Mongolia's coal exports accelerating towards 50 Mt by 2015

Mongolia's coal exports are expected to jump 50% to 25 Mt this year and rise further to between 30-35 Mt in 2012, A. Erdenepurev, general-director of the fuel policy department at Mongolian's Ministry of Mineral Resources and Energy, told Reuters.

Mongolia's coal exports are expected to reach 50 Mt as the eastern section of the huge Tavan Tolgoi mine comes onstream by 2014 to 2015, he said, adding "looking at our production growth over the past few years, these short-term forecasts can be quite conservative."

However, a severe lack of infrastructure poses formidable challenges to the mining boom. "There are 5,000 trucks per day on the road linking the southern Gobi region to the Chinese border right now and that number is going to grow and cause congestion," Erdenepurev said.

"There is a serious need for new infrastructure but it also demands huge investments." Estimated costs to build proposed railways, road, water and power stations were at least $3.5 billion -- accounting for more than half of the country's gross domestic product, Erdenepurev said.

"Separately, Erdenepurev said bid results for developing the the western section of the Tavan Tolgoi deposit are expected to be released by 1 July. The government has already shortlisted six bidders out of a list of 15 to develop the mine, including ArcelorMittal, Vale, Xstrata, Peabody and a consortium of Chinese energy firm Shenhua and Japan's Mitsui & Co. Another consortium, led by South Korean state body Korea Resources and including POSCO, utility KEPCO, trading firm LG Corp, Daewoo International, Russian Railways, and Japanese trading houses Itochu Corp, Sumitomo Corp, Marubeni Corp and Sojitz Corp, is also in the running," Reuters stated.

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