Friday, February 21, 2014

Vice Mining Minister at Coal Mongolia: Wake up from your slumber, Mongolia!

The biggest coal sector event in Mongolia, Coal Mongolia 2014 kicked off on Thursday. The agenda highlighted the urgent need for the development of coal related policies, transportation and railways, and the need to increase competitiveness in the market.

Most of the panelists at Coal Mongolia, in one way or another, emphasized the vast opportunities present for Mongolia in the sector, especially given the steady rise in coal demand in China and Mongolia’s vast resources, but also noted that major issues in the sector such as transportation and refinery plant projects aren’t being addressed by the government.

The first session of the conference echoed many of the same coal sector issues and concerns raised during the previous year’s conference.

CEO of state-owned Erdenes MGL O.Sainbuyan underlined that Mongolia’s coal industry is lagging behind other competitors and that the lack of transportation and coal refineries has resulted in a drop in exports to China, Mongolia’s biggest buyer. He also highlighted the need for a unified plan to develop and integrate coal gasification and liquefaction plants as well as rail links to buyers.

He noted that although China’s coal imports increased last year, Mongolia’s exports dropped while other suppliers increased their coal shipments to China, illustrating Mongolia’s lack of competitiveness and competency in the industry. O.Sainbuyan said that Mongolia needs to find more buyers and enter other markets to boost income from its vast coal reserves.

Mongolia hosts 10 percent of the world’s known coal reserves at an estimated 162 billion tons in 2011 with 17 operating coal mines. Coal exports formed 26 percent of total exports last year, and makes up 27 percent of the state budget.

A major theme at last year’s conference was the urgent need for transportation and railways to increase domestic coal production capacity. At this year’s conference, President of the Mongolian Railway Engineer’s Association L.Purevbaatar introduced Asia-Pacific region plans to form a transnational railway network and Mongolia’s potential to play a key role in its development.
He said that although a great deal of opportunity is present for Mongolia due to its central location in the region, since the last Coal Mongolia conference, no efforts have been made on the part of the government or industry officials to exploit this potential.

“Developing ports for foreign trade and railway projects were not mentioned at all in the conference that took place in Hohhot in China. This is the sort of issue we are facing. As to why these discussions aren’t being made has to be addressed. These projects require high level discussion to be actualized,” said L.Purevbaatar.

Foreign Minister L.Bold could not address the question of the slow progress of meetings and contracts over rail issues with neighboring countries, as he left the conference midway through the first session.

Mongolia still hasn’t finalized major aspects of the railway project, such as which track gauge to use, and yet, a presentation by Deputy Minister of Mining O.Erdenebulgan showed pictures of railway groundwork currently being executed.

Debate over whether to use the international standard track used by the Chinese or the Soviet style track have been present since the project was first discussed. As a former communist state, all railway tracks in Mongolia were built by the Soviet standard.

In the second session, the Deputy Minister of Economic Development gave an explicit speech about the need for Mongolia to wake up from its slumber to boost the coal sector. He underlined the necessity to capitalize on the coal sector to replenish the economy and pay off the over two billion USD in debt that Mongolia owes to foreign investors through bonds and loans.

“Giant international investors such as Oyu Tolgoi and Aspire Mining aren’t making moves to intensify their activities, waiting for Mongolia to pick up the slack,” he said. “Forget transnational railways for the time being. Bottom line is, we need to be able to transport quality products to the border.”

The environmental issues regarding extensive coal exploitation in Mongolia were not talked about in the first and second sessions of the conference. The only panelist to touch on the issue was the Head of the Environment and Natural Resource Department and the Ministry of Environment and Green Development, D.Enkhbat, who introduced the ministry’s policy on coal mining. He said that, in general, the ministry expects responsible exploitation of natural resources that causes minimal impact to the environment by mining companies.

Young People Protest Mining at Coal Mongolia

A group of around 20 young people protested outside the SS Convention Center, where Coal Mongolia 2014 took place, objecting to mining and natural resource exploitation in Mongolia.
The protesters held banners stating, “No more mining, enough is enough!” and “Will not let you dig anymore!”

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