Mongolia pins coal export ranking hopes on railway – Mr Gotov

September 06 03:24 2013 Print This Article September 4, 2013

Mr Battsengel Gotov CEO of Mongolian Mining, Mongolia will have a better chance of regaining its position as the top exporter of coal used to smelt steel in China after a railway is completed in late 2015.

Mr Gotov said that “Competitiveness of Mongolian coal is strongest in the China market due to its geographical proximity, but it has been hampered by the major obstacle of transportation. With the expected completion of a railway by the end of 2015, Mongolia will make a comeback.”

Mr Gotov made the comment after the company posted a net loss of USD 25.2 million for the H1 of the year, against a profit of USD 31 million a year earlier, due to lower coal prices and higher finance costs.

Mongolia lost its leading export position to Australia in the H1 of the year with its coking coal exports to China falling 36% to 6 million tonnes. Australia’s exports to China doubled to 13.3 million tonnes.

Despite the shorter distance to China’s steel mills, a lack of efficient transport by rail meant that Mongolian coal trucked to the Chinese border lost market share to seaborne Australian coal.

A large portion of imported coking coal is sold to coastal steel mills, with Mongolian coal requiring further rail transport after crossing the border.

Mr Andrew Driscoll head of CLSA resources equities research said that BHP Billiton Mitsubishi Alliance, Australia’s largest metallurgical coal miner and exporter, had been ramping up production to achieve lower costs and productivity gains this year.

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Saranchimeg Enkhee
Saranchimeg Enkhee

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