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New UserMongolia seeks to boost coal exports to China with new rail link
07 Feb 2025
Mongolia plans to
press China next week to approve a new railway link that could boost an already
growing coal trade between the two countries.
Mongolian Prime Minister Oyun-Erdene Luvsannamsrai
will travel to China Feb. 13 and plans to sign an agreement with officials
there to build a cross-border line and expand coal production from the Tavan
Tolgoi coal mine, a government spokesperson told Bloomberg.
China Foreign Ministry Spokesman Guo
Jiakun declined to comment on the specific exchange, but said the two countries
are committed to deepening cooperation in a variety of fields.
Mongolia
was China’s fourth-largest supplier of foreign coal last year, and provided 60%
of coking coal imports for the nation’s massive steel mills. Increasing the
trade would mean more revenue for Mongolia, while Chinese buyers may need to
find replacements for some US and Russian cargoes because of tariffs and trade
sanctions.
The
land-locked nation’s parliament has already approved the railway connection and
authorized 976 billion tugrik ($283 million) in financing for state-owned miner
Erdenes Tavan Tolgoi JSC to build it, Ikon News reported, citing a Ministry of
Industry and Mineral Resources press conference. The deal with China is also
expected to include coal sales and purchase agreements, Ikon reported.
Coal
shipments from Mongolia to China jumped to nearly 83 million tons last year
from 70 million in 2023 and just 31 million in 2022, when the country built a
240-kilometer (149-mile) railway line to China from the Tavan Tolgoi mine. The
tracks stopped just short of the border, however, requiring trucks to complete
the trip.
Completing
the rail connection won’t solve all the transportation headaches. Mongolia uses
Russian standard rail gauges that differ from those used in China.