Coal shipment to China surges

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The number of trucks passing through the southern border checkpoints has started to hike up as COVID-19 restrictions ease.

On May 23, 643 trucks exported coal through Gashuunsukhait border crossing and 312 trucks through Shiveekhuren border crossing, according to the Ministry of Finance. The average daily output used to be slightly over 800 trucks after the temporary border closure lifted, but now it is nearing 1,000 trucks per day. This is said to be the highest amount of export completed on a weekly basis since the border closure was canceled on March 23.

On average, 51 percent of total coal exports are conducted through Gashuunsukhait. Mining companies reportedly generate 3.5 billion to 4 billion USD in mineral product sales per year at this border checkpoint.

Between January 1 and May 24 this year, Mongolia exported a total of 5.6 million tons, generating 458.7 million USD, reported the General Customs Office. This amount is equal to about a third of coals exported in the same period of last year, according to preliminary results. Last year in May, companies had exported coal worth 1.2 billion USD, but this year, it is worth roughly 460 million USD.

The government planned to export 42 million tons of coal in 2020 and earn 1.4 trillion MNT in revenue. However, the unexpected pandemic prompted Mongolia to place travel restrictions, force people into confinement, close borders and stop flights. This has caused the steadily growing Mongolian GDP growth to go into the negative, reaching -10.7 percent. The temporary halt in coal export had the strongest impact on GDP, according to economists. The mining sector, which accounts for around 25 percent of Mongolia’s GDP, is expected to curb this year as companies cut down their spending on quarrying and mining operations

Dulguun Bayarsaikhan