Coal sector prioritizes a competitiveness improvement

Ulaanbaatar /MONTSAME/ The "Coal Mongolia-2015" at the city's "SS" center is continuing with discussions dedicated to ways of improving the competitiveness of the coal sector at international level. The Minister of Mining R.Jigjid highlighted the mining as the pillar economic sector of Mining, and said the forum’s main purposes are to inform about the state policies and explain legal renovations for domestic and foreign companies and investors in the mining sector, to attract more investments. "Mongolia has a goal to supply its coal to the market of Asia-Pacific. Our coal reserves stand at 173 billion tonnes, 27 billions are the guaranteed reserves," he said. These goals can be realized provided the legal environment is refined, he added. The coal sector growth peaked in Mongolia in 2011, when 80 percent of the total revenue of state budget was accumulated from this sector, he noted. After this, the Minister M.Enkhsaikhan gave a "Status of Tavan tolgoi agreement, challenges and solutions" presentation. He said Mongolia needs to cut expenses and to boost coal extraction, now that the country’s coal marketing lags behind irrelevantly to its enormous riches. The way of boosting the coal mining is to assign the production, transport and commercialization to "one hand”, he said. "I am pleased to inform you that Sumitomo has begun making advertisements in Japan about the Tavan tolgoi project. The cooperation with the investing consortium will facilitate us with an opportunity to sell coal to India, Japan, Taiwan and many other countries. Our negotiations touched upon over 300 issues including the intended increase of estimated reserves. Seventy percent of the total investments required will be drawn from banking and financial organizations," he said and added that Tavan tolgoi project will stay in ownership of Mongolia. A presentation themed “Competitiveness of Mongolia’s coal sector in the world” was given by the executive director of Energy Resource LLC G.Battsengel. He noted that coking coal extraction that stood at 563 million tonnes declined to 20 million tonnes now. The main coal markets in the Asia-Pacific concentrate around the ports of Japan, South Korea and Indian Ocean. “We can use Chinese railway networks for transportation. All in all, transportation and logistics have to be settled at first," said Mr Battsengel. According to the studies, he went on, the average coal transport expense stands at 75-98 US dollars, as for Mongolia, this number is at 126 US dollars, just to reach Tianjin port of China, "this shows a disadvantage of our coal". "We have two choices either to stay small in a small market or to strive for international competition," he stressed.