Commodity

Coal export falls 9 million tons as disruption remains

2020  |  May - June   |  029

  •  14 out of 34 coal mines produced 6.9 million tons of coal in first half
  •  The average price at the border now stands at USD 81.5 per ton

The minerals export has fallen by USD 1.3 billion year-over-year in May according to the National Statistics Office as the looming impact of the pandemic prolongs. Copper concentrate export shrank USD 278.6 million from the year-earlier, while coal export dipped USD 761 million, becoming the biggest laggard in the collapse. But it was a recovery nonetheless compared to the previous months. About 400-700 coal trucks are crossing borer at the Gashuunsukhait border checkpoint, while the average cross-border transportation at Shiveenkhuren checkpoint is at about 450-500. The coal export jumped 117 percent in May compared to the previous month, to 2.17 million according to the data compiled by the Customs Office. But this is still 41 percent lower than the same period of last year. In specific, 6.3 million tons of coal worth USD 512.7 million were exported last month and that is compared to the 8.8 million coal that adds up to USD 758.8 million of last year. The average price at the border, which was about USD 84.4 per ton in May of 2019, now stands at USD 81.5 per ton.

14 out of 34 coal mines produced 6.9 million tons of coal from January to June 18, and 17 companies have sold 5.7 million tons of coal as informed by the Mineral Resources and Petroleum Authority of Mongolia.

China’s coal import did not drop during this period and only the border issue is having an impact on coal export

Only a few companies, namely “Erdenes Tavan Tolgoi”, “Energy Resources”, state-owned “Tavan Tolgoi” JSC, “Monolyn Alt-MAK”, and “Southgobi Sands” made up the majority of the exported coal, about 80 percent. Gashuunsukhait border checkpoint, which over half of the coal is exported, was opened on March 23 and about 60-70 coal trucks were crossing the border on a daily average at first, which then recovered moderately in April to about 200. As of May 23, the total number of coal trucks crossing the border via Gashuunsukhait and Shiveenkhuren checkpoints totaled 955.

For instance, “Erdenes Tavan Tolgoi”, “Energy Resources”, “Tavan Tolgoi” JSC, “Khangad Exploration” produced a total of 4.9 million tons of coal with sales reaching 3.3 million tons, out of which the thermal coal amounted to 100,000 tons, low-grade coking coal - 154,000 tons, raw coking coal - 1.9 million tons, and refined coking coal - 1.1 million tons. The average price per ton of “Erdenes Tavan Tolgoi” stands at MNT 159,400 - MNT 196,400, “Energy Resource” - MNT 366,672, “Tavan Tolgoi” JSC - MNT 150,000 - MNT 158,624, and “Khangad Exploration” - MNT 197,645, showing relative stability in prices.

As for the companies exporting via Shiveekhuren, namely “Mongolyn Alt-MAK” LLC, “Qinhua-MAK-Nariinsukhait” LLC, “Southgobi Sands” LLC, “Usukh Zoos” LLC, and “Tsagaan-Uvuljuu” LLC produced a total of 1.5 million tons of coal. From this amount, thermal coal totals 659,000 tons, low-grade coking coal - 1.1 million tons, and refined coking coal - 130,000 tons. “Mongolyn Alt-MAK” LLC has sold about 823.4 thousand tons of coal at MNT 50-143 thousand per ton, “Qinhua-MAK-Nariinsukhait” LLC - 347,000 tons at MNT 108-179 thousand per ton, “Southgobi Sands” LLC - 471 thousand tons at MNT 65-113 thousand per ton, “Usukh Zoos” LLC - 256 thousand tons at MNT 37-45 thousand per ton, “Tsagaan Uvuljuu” LLC - 13.2 thousand tons at MNT 165 per ton.

“Ikh Gobi Energy” LLC exported about 14.6 thousand tons of coal via Khangi border checkpoint at an average price of MNT 117,000, “COAL” LLC sold 92 thousand tons of coal at MNT 184 per ton respectively, while “Mo En Co” LLC produced 255.7 thousand tons of coal and traded 104.6 thousand tons of refined coal at an average price of MNT 192 thousand.

As for Zamiin-Uud border checkpoint, “Stein Cole” LLC has traded 55.7 thousand thermal coal at MNT 45 thousand, “Friendship Resource” LLC - 16.8 thousand tons of thermal coal at MNT 390-490 thousand. Also, “Cosmo Coal” LLC sold 70.8 thousand tons of thermal coal at MNT 49 thousand per ton.

Although coal export is recovering, it is nowhere near last year’s level. China’s coal import did not drop during this period and only the border issue is having an impact on coal export.

The Ministry of Finance is made a plan where 42 million tons of coal would be exported. The statistics of the first five months make it clear that the plan is already way off the mark. If the coal export comes out lower than the target, it is clear that the FX flow will fall short, disrupting the budget revenue, and the financial situation of suppliers including the coal transporters will be impacted further.  

 



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