Mongolia Aims to Boost Chinese Coal Sales to 100 Million Tons

Mongolia, the landlocked nation nestled between Russia and China, is setting its sights on an ambitious target: increasing its coal exports to China to 100 million tons by 2025. This goal, outlined in the country's proposed budget, is part of a broader strategy to boost economic growth and fiscal revenue. The Mongolian government is banking on the continued demand for coal in China, which remains the world's largest coal importer, to drive this export surge.

Mongolia's coal reserves, estimated at around 15.7 billion metric tons, provide a solid foundation for this export target. The country's proximity to China, coupled with the inauguration of the Gashuunsukhait-Gantsmod cross-border railway in late 2022, has significantly improved Mongolia's coal export capacity. This new railway link has facilitated an increase in coal export capacity and helped maintain high coal revenues despite a decrease in global coal prices in 2023.

To achieve this lofty goal, Mongolia is investing in enhancing its coal transportation capacity and infrastructure. The government plans to continue developing railway ports and complete the cross-border connection at the Gashuunsukhait-Gantsmod port, which will increase coal export capacity by 30-50 million tons per year. The Ministry of Finance has estimated that the total export revenue could reach USD 16.7 billion by the end of 2024, thanks to these infrastructure developments.

However, Mongolia's ambitious coal export target faces several challenges. China's economic deceleration and potential reductions in demand for raw materials, including coal, could impact the feasibility of Ulaanbaatar's growth goals. Additionally, geopolitical risks, such as tensions between China and other countries, could lead to disruptions in the coal trade. Infrastructure limitations and environmental concerns also pose challenges to Mongolia's coal export targets.

Despite these hurdles, Mongolia's coal export target to China is a testament to the country's commitment to driving economic growth and fiscal revenue. By investing in coal transportation capacity and infrastructure, Mongolia aims to maintain its position as a major player in the global coal market and secure a brighter economic future for its citizens.