The commercial operation of Haoji railway provides a channel for Mongolian coking coal to seize larger market share in China, as it will boost domestic demand for Mongolian coal, said Chang Yijun, president of China-based coal consultant Fenwei Energy Information Services Co., Ltd. at a recent mining industry summit.
With annual shipment capacity of over 200 million tonnes, it will provide a convenient linkage between energy hubs of Inner Mongolia, Shaanxi, Gansu and Ningxia with consuming provinces of Hubei, Hunan and Jiangxi, which is conducive to stable coal supply for central China and faster development for western regions.
More importantly, it will help expand coal exports to China from neighboring Mongolia, especially coking coal that is in shortage in China, Chang said at the Minerals and Mining Business Summit held in Mongolia's capital city Ulaanbaatar on September 27.
The summit, the 17th annual Discover Mongolia conference, was organized by the Ministry of Mining and Heavy Industry, the Business Council of Mongolia and the Mongolian National Mining Association.
Chang was invited to deliver a speech on the Chinese and Mongolian coking coal market at the summit, which was co-organized by sxcoal.com, an industry portal run by Fenwei Energy.
Coal industry has been of great significance to Mongolian economy. Mongolian statistics showed coal accounts for over 90% of the country's primary energy consumption, while coal export contributes more than 1/3 of its total revenue.
Tavan Tolgoi mine, the largest coal field in Mongolia, could only ships coal via trucks to Ganqimaodu border crossing in China currently due to lack of direct rail links.
Construction of a 208.5-km rail project from Tavan Tolgoi mine to Gashuun Sukhait border crossing in southern Mongolia was restarted officially on August 15 this year after years of halt, and is scheduled to complete and put into use by 2021. China has completed construction of a railway linking with Gashuun Sukhait.
If the railway comes into use in the future, Mongolia could export more than 30 million tonnes of coking coal annually at much lower cost, Chang said. "This will help increase profits of Tavan Tolgoi mine significantly," he noted.
Several senior officials of Mongolian coal industry association and mining groups also pledged to tackle transport woes and actively build rail coal lines, in a bid to boost coal exports and enhance competitiveness of Mongolian coal.
Chinese customs data showed Ganqimaodu border crossing imported 13.8 million tonnes of coal in the first eight months this year, while imports jumped 45.34% on the month to 2.51 million tonnes in August.
In January-August, China shipped 23 million tonnes of coking coal from Mongolia, down from 27.69 million tonnes during the same period last year.
(Writing by Tammy Yang Editing by Harry Huo)
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