50 to 60 percent of coal planned to be traded through stock exchange by 2024
The first coal exchange of Erdenes Tavan Tolgoi, a subsidiary of Erdenes Mongol Company, was held on Wednesday at 10:00 a.m. The company sold 5 packages of hard coking coal or 32,000 tons. During the exchange, the price of coal rose by 0.28 percent reaching 179.1 USD per ton from 178.6 USD per ton. In total, the company sold the coal for 5.7 million USD.
The next coal exchange event is planned to occur today at 10:00 a.m. In relation to the exchange, the draft of the government’s resolution on the execution of mining products exchange trading by the Mongolian Stock Exchange JSC was discussed.
At Wednesday's regular meeting of the Cabinet, the draft resolution on the execution of mining products exchange trading by the Mongolian Stock Exchange JSC was discussed.
Minister of Mining and Heavy Industry J.Ganbaatar, presented the decision and said, “The Law on Mining Exchange has been approved. It will be implemented from upcoming July 1. Clause 5.8 of Article 5 of the law stipulates that the exchange shall be established independently or under the Mongolian Stock Exchange. According to the law, within the framework of the decision to be made by the government, the government made an official decision on Wednesday to sell coal based on the Mongolian Stock Exchange. Erdenes Mongol company will trade 130,000 to 140,000 tons of coal to 21 client companies in three auctions starting from February 9.”
This amount of coal will sold for a month. Mongolia is planning to sell 12 million tons of coal on the exchange by July 1, 2023. By 2024, it is planned to increase the annual coal exchange trade from 50 percent to 60 percent, and in 2025, all coal will be sold on the exchange.
Minster J.Ganbaatar said, “Depending on the capacity of our port, we are trading step by step on the exchange according to the standards of other countries; transparent and competitive. In the future, it is possible to trade all metals such as copper, fluorspar, and iron through the exchange. The exchange setup for other metals will be implemented within the next three years. Everyone knows that coal is associated with corruption and the suspicions that arise with it. Therefore, we will sell our coal based on the stock exchange in accordance with international standards. If a separate exchange were to be established, according to preliminary estimates, more than 30 billion MNT in capital, finance, and personnel would be needed. Therefore, it is advantageous to rely on the Mongolian Stock Exchange with its existing infrastructure and personnel. The coal selling company will determine and announce the price itself, and when the law comes into effect on July 1, the exchange will determine the price itself."
He also informed that on the February 27, 150 customers or buyers of coal from China will come to Mongolia. As part of Mongolia's decision to sell coal through the Exchange, China's coal buyers will be invited to introduce the advantages of the coal exchange and the relevant law.