“Mongolia will be the success story in Asia in the coming decade”
Speakers at the 2012 Coal Mongolia conference claim Chinese demand as the key to Mongolia’s mining future.
Representatives from Mongolian and international companies claimed that a downturn in world coal resources has boosted the country’s mineral export potential, and that Mongolia’s strategic proximity to China would give it a global advantage.
Currently 86% of Mongolian mineral exports go to China, the worlds biggest importer of coal products. According to the head of Mongolia’s Trade and Development Bank ‘s Randolph Koppa, “China is the driver of coking coal, and coking coal is the most important product on Mongolian market at the time.”
Mongolia exported 20 million tonnes of coking coal last year, and independent estimates claim that number could rise to 70 million within five years. China currently imports 70 million tonnes, meaning that Mongolia could fulfill a majority of Chinese demand within half a decade.
Koppa also backed other representatives in discussing Mongolia’s potential to replace other coal exporters.
Special mention was given to Australian-Chinese coal contracts, which have suffered over the past two years due to a series of political and environmental factors. Oscar Mendoza, Chief Operating Officer of Frontier Securities LLC, claimed that “the supply contracts [Australia] lost have not been recovered, while Mongolia has managed to maintain them.”
Christopher Harris, Vice President of General Electric confirmed that, “last year Mongolia exceeded Australia in terms of coking coal.” The setbacks in nuclear energy due to the Japan’s tsunami have also given a predicted boost to the global coal economy, while redirection of Australian and Mozambican coal to India gives Mongolia a head start in the Chinese market.
China imported 1.9 billion tonnes of coal in 2009, even with a predicted downturn in the market, imports are still expected to reach 3.4 billion by 2011.
“Coal projections are off the charts,” said Mendoza. “The question will be how Mongolia can capitalise on this without harming its other industries.”
Some speakers echoed this concern for growth in other sectors, Kathleen Morenski from the US Embassy said, “the public view of mining is not consistent with realities, that’s the Government’s responsibility.”
Representatives also made note of Mongolia’s underdeveloped infrastructure system, saying logistics would be one of the biggest inhibitors to growth in the coal mining sector. The train system and transport costs in China were key items of discussion.
“The railway from Tavan Tolgoi to the border is the most immediate need” said Koppa, “and the costs of transport in China also need to be taken into account. There needs to be rail investment, but that’s not going to happen until a commitment comes from our side”
Despite identifying transport as a main inhibitor in mining operations, J.Bat-Erdene from the department of transport stressed that Mongolia had a future of developed infrastructure. He claimed that there was an “increase of over 20 000 tonnes of coal carried on the country’s rail lines last year.”
Corporate governance was also discussed in terms of development, with investors claiming that poor regulations would be a hurdle in short term operations.
“Lack of good governance hobbles growth,” said Gregory Goldhawk, Ambassador of the Canadian Embassy in Mongolia, Mongolia climbed in world [governance] rankings from the 67th to 54th position in the last year, which is remarkable, but we need to be honest with ourselves. There is still much work to be done in terms of Mongolian governance.”
“I’m bullish on Mongolia though. It will be the success story in Asia in the coming decade” said Goldhawk.
The convention is the second national mining convention to be held in Mongolia, and is aimed at attracting investors to mining and infrastructure projects in the country.
Speaker sessions will run for one more day before representatives are flown out on field trips to key coal mining sites.
Representatives from Mongolian and international companies claimed that a downturn in world coal resources has boosted the country’s mineral export potential, and that Mongolia’s strategic proximity to China would give it a global advantage.
Currently 86% of Mongolian mineral exports go to China, the worlds biggest importer of coal products. According to the head of Mongolia’s Trade and Development Bank ‘s Randolph Koppa, “China is the driver of coking coal, and coking coal is the most important product on Mongolian market at the time.”
Mongolia exported 20 million tonnes of coking coal last year, and independent estimates claim that number could rise to 70 million within five years. China currently imports 70 million tonnes, meaning that Mongolia could fulfill a majority of Chinese demand within half a decade.
Koppa also backed other representatives in discussing Mongolia’s potential to replace other coal exporters.
Special mention was given to Australian-Chinese coal contracts, which have suffered over the past two years due to a series of political and environmental factors. Oscar Mendoza, Chief Operating Officer of Frontier Securities LLC, claimed that “the supply contracts [Australia] lost have not been recovered, while Mongolia has managed to maintain them.”
Christopher Harris, Vice President of General Electric confirmed that, “last year Mongolia exceeded Australia in terms of coking coal.” The setbacks in nuclear energy due to the Japan’s tsunami have also given a predicted boost to the global coal economy, while redirection of Australian and Mozambican coal to India gives Mongolia a head start in the Chinese market.
China imported 1.9 billion tonnes of coal in 2009, even with a predicted downturn in the market, imports are still expected to reach 3.4 billion by 2011.
“Coal projections are off the charts,” said Mendoza. “The question will be how Mongolia can capitalise on this without harming its other industries.”
Some speakers echoed this concern for growth in other sectors, Kathleen Morenski from the US Embassy said, “the public view of mining is not consistent with realities, that’s the Government’s responsibility.”
Representatives also made note of Mongolia’s underdeveloped infrastructure system, saying logistics would be one of the biggest inhibitors to growth in the coal mining sector. The train system and transport costs in China were key items of discussion.
“The railway from Tavan Tolgoi to the border is the most immediate need” said Koppa, “and the costs of transport in China also need to be taken into account. There needs to be rail investment, but that’s not going to happen until a commitment comes from our side”
Despite identifying transport as a main inhibitor in mining operations, J.Bat-Erdene from the department of transport stressed that Mongolia had a future of developed infrastructure. He claimed that there was an “increase of over 20 000 tonnes of coal carried on the country’s rail lines last year.”
Corporate governance was also discussed in terms of development, with investors claiming that poor regulations would be a hurdle in short term operations.
“Lack of good governance hobbles growth,” said Gregory Goldhawk, Ambassador of the Canadian Embassy in Mongolia, Mongolia climbed in world [governance] rankings from the 67th to 54th position in the last year, which is remarkable, but we need to be honest with ourselves. There is still much work to be done in terms of Mongolian governance.”
“I’m bullish on Mongolia though. It will be the success story in Asia in the coming decade” said Goldhawk.
The convention is the second national mining convention to be held in Mongolia, and is aimed at attracting investors to mining and infrastructure projects in the country.
Speaker sessions will run for one more day before representatives are flown out on field trips to key coal mining sites.
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