Mongolia's January coal exports drop nearly 25% from last year

ULAANBAATAR – Mongolia's coal exports dropped by nearly a quarter in January from a year earlier, with deliveries disrupted by ongoing congestion at the border with key trading partner China.

The fall was part of a 6.3% year-on-year decline in overall mineral exports, according to data published by Mongolia's National Statistics Office on Wednesday.

The nation's January coal exports dropped 24.1% to 1.995-million tonnes, with their value down 18.45% at $138-million, the data showed.

China was the destination of 90% of Mongolia's total exports in January.

The office did not specify how much coal was shipped to China over the period, but deliveries have been disrupted for at least six months, with customs authorities limiting the number of trucks allowed to pass through the border amid a crackdown on the smuggling of products like meat.

In late December, Mongolia suspended coal deliveries to clear the key supply road of a dangerous queue of traffic that at times stretched 100 km into the Gobi desert.

The road is now operational, but companies have been issued quotas to restrict the number of trucks allowed to use it. The government also plans to open a new route for coal trade to reduce congestion.

According to Chinese customs data, Mongolian coal shipments to its southern neighbour fell 18.6% in December, 2017 to 2.83-million tonnes, though volumes rose 27.6% to 33.6-million tonnes over the year as a whole.

The Mongolian data showed that the value of gold exports from the country climbed 49.3% year-on-year in January to $27.16-million.

However, copper exports continued to sag, falling 7.4% in value, with ore grades in decline at the open pit in the Oyu Tolgoi mine, run by Rio Tinto.

Ore grades are expected to improve at Oyu Tolgoi when production from the underground mine commences in 2021.