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COVID-19 cases in Inner Mongolia affect ports, but coal imports from Mongolia set to jump

New COVID-19 cases in North China’s Inner Mongolia Autonomous Region are likely to affect China’s coal imports from its increasingly significant coal supplier Mongolia due to disruptions at some major ports, according to sources on Wednesday, further raising concerns over coal supply in China as officials moved to address shortages and price hikes.

However, some ports remained open for coal transport and the impact will likely be temporary as China and Mongolia have stepped up cooperation in coal trade. Mongolian Ambassador to China Tuvshin Badral told the Global Times on Wednesday that arrangements are being made by both sides to increase Mongolia’s annual coal exports to China by as much as 50 percent from 32 million tons currently.

Ceke Port, the third-largest land port in Inner Mongolia and a major port for coal imports from Mongolia, was closed on Wednesday after discussion among local officials, people familiar with the matter told the Global Times.

The decision was made after the local health commission said Ejin Banner in Inner Mongolia, which borders Mongolia, reported five confirmed COVID-19 cases on Tuesday, and the port city of Erenhot reported three on Wednesday.

All movements of people and freight were halted at the Ceke Port on Wednesday, according to the sources, who spoke on the condition of anonymity.

Ceke Port is the only global trade channel in Alxa League, which covers Ejin Banner, and is jointly operated by Northwest China’s Gansu, Shaanxi and Qinghai provinces, the Ningxia Hui Autonomous Region and Inner Mongolia. It is the main port for coal imports from Mongolia.

Last year, around 10.68 million tons of coal were imported via the port, the Global Times learned.

Another major port, which is the biggest road port in terms of imports – Ganqimaodu Port in Inner Mongolia – was allowed to continue road freight transport, the same source said.

In recent days, the number of vehicles cleared at customs daily doubled from the previous number of 150 at the Ganqimaodu Port, according to cnenergynews.cn. About 600 vehicles are expected to transport coal each day in the future, in order to clear the coal inventory of 8.37 million tons that has built up in a zone in Mongolia by February 2022.

Due to the cases reported in Erenhot, road freight transport was halted on Wednesday in both directions via the Erenhot Port, two people familiar with the matter confirmed with the Global Times.

“But railway transport is allowed, with coal, iron ore and wood being imported without interruptions,” a source said.

However, despite the short-term disruptions, China’s coal imports from Mongolia is set to increase sharply given closer cooperation between the two countries and ongoing efforts for transportation, officials said.

“Coal exports to China account for 80 percent of the total bilateral trade of goods, which is a very high level,” Badral said in an interview on Wednesday.

More than 3,000 Mongolian drivers are engaged in cross-border transportation of coal, he said. And in order to promote bilateral trade, the two countries are discussing the wider opening of railway freight transport at major ports.

“We look forward to the railway being completed and open for use next year. After the opening of the railway, exports of coking coal from Mongolia to China are expected to increase by 10-20 million tons. Currently, Mongolia exports 32 million tons of coal to China every year, which will increase by 50 percent after opening to railway traffic at the border,” the ambassador said.

Efforts to boost coal imports from Mongolia came after Chinese Premier Li Keqiang told his Mongolian counterpart during a meeting on October 12 that China hopes to expand coal trade and cooperation with Mongolia to achieve mutual benefits and win-win results.

While China imports coal from several major suppliers such as Indonesia, Australia and Russia, Mongolia this year has grown to be China’s largest coking coal supplier.

Coal imports from Mongolia accounted for around 10.5 percent of China’s total coal imports in 2020, according to calculations by the Global Times, and the neighboring country’s coal supplies helped with China’s growing needs in recent days.

Power shortages due to tight coal supplies have prompted Chinese officials to vow all necessary means to curb irrational coal prices and expand supplies, including increasing imports.

The irrational rises of coal prices brought about a power crunch in China, pushing the country’s coal imports up 76 percent year-on-year to 32.88 million tons in September.

China’s top economic planner on Tuesday vowed to resort to all necessary means to intervene in coal prices, as the official stance grows harsher on runaway coal prices that have put energy supplies at stake.