Sinopec Limited to enter Mongolia’s mining sector

Sinopec Limited, also known as the China Petroleum and Chemical Corporation has signed a memorandum of understanding (MoU) with the Ministry of Mining to build a brown coal gasification plant in Mongolia. 

Once the plant launches operations, Mongolia will not only be able to produce enough gas fuel to meet domestic demands, but also to export it.

The plant will have the capacity to produce 15 billion metric tons of gas fuel per year according to preliminary estimates. In order to produce the target amount of gas fuel, approximately 50 million tons of brown coal will be required, at the estimated cost of one billion USD.

Although Mongolia has abundant reserves of raw brown coal, its potential for export is limited due to its low calorific content. The gasification plant will produce environmentally friendly gas fuel, that doesn’t produce waste, using common brown coal which contributes very little to Mongolia’s export.

If Mongolia starts exporting gas fuel, it will help reduce the country’s foreign trade deficit and contribute to the state budget.

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