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AsiaElec COAL AsiaElec

Mongolia frets as China re-opens

coal trade door to Australia

MONGOLIA China’s easing of its unofficial ban on Austral- periods will result in fewer logistical bottlenecks
ian coal imports, allowing in some select ship- in China following the current wave of Covid-
ments, has caused anxiety among officials and 19 infections in the country, allowing Mongolian
miners trying to raise Mongolian coal output and Russian imports to accelerate.
and exports. But some experts have pointed Mongolia exported 4.18mn tonnes of coal in
out that there is no expectation that Australian November, marking a 424.1% y/y increase, the
coal imports will harm Mongolia’s coal exports; highest monthly volume achieved in the year
rather the more likely scenario is tht Mongo- and nearly matching the high coal export num-
lia itself might harm its potential to sell coal to bers achieved in 2020.
China. China’s increasing need to secure energy
On January 4, China resumed coal imports supplies following the relaxation of covid restric-
from Australia for three central govern- tions has prompted China to gradually resume
ment-backed utilities and a top steelmaker. The Australian coal imports and urge domestic min-
unofficial boycott on Australian coal began in ers to increase their already record output, thus
2020 amid diplomatic spats, with other coun- demand for Mongolian coal demand is unlikely
tries such as Russia and Mongolia stepping in to to abate anytime soon.
fill the void. Mongolia is concerned that the per- Mongolia’s recent coal theft scandal, which
mitted flows of Australian coal, such as highly sparked mass public outrage, has caused the
sought-after prime low-vol (PLV) hard-coking country’s leaders to scramble to make changes
coal, will suck momentum out of its newly re-en- to address issues that enabled the “coal mafia”
ergised coal exports to China. to operate in the first place. There is to be more
However, traders in Singapore told Fast- transparency. Mongolia is shifting from mine-
Markets that nothing will change dramatically. mouth prices to border exchange prices starting
“Good demand for Australian PLV may not from February 1. However, these changes could
have much of an impact on the abundant supply reduce the appeal of Mongolian coal.
of Mongolian and Russian coals, which should With the recent appointment of Chi-
continue to flow into China at stable or higher nese-speaking lawmaker Bulgantuya Khurel-
quantities,” a trader source in Singapore told the baatar as the minister in charge of land port
trade publication. revival, Mongolia was all set to go through with
The theory is that China’s elimination of its changes. But it hadn’t accounted for China
Covid-19 tests and removal of covid quarantine re-opening its coal trade door to Australia.™

Week 03 17•January•2023 www. NEWSBASE .com P9