The restrictions mean that Mongolia’s coal exporters are forecast to overtake Australia as China’s top coal supplier from this year, according to a report from London-based commodity research firm IHS Markit.
Tipping the balance
In 2018 Australia had 44% of China’s total coal import market share against Mongolia’s 43% but HIS Markit says this balance will swing in Mongolia’s favour in future years.
Improving Mongolia-China road and rail infrastructure linkages and Beijing’s focus on capping seaborne imports have been cited by the research firm as two key drivers in tipping the balance.
Aspire is a leading ASX-listed Mongolian metallurgical coal company with projects in the country’s north.
Executive chairman David Paull noted: “China’s shift toward increased Mongolian coal imports is an inexorable trend given both Mongolia’s proximity on China’s doorstep and the enormous quantity and quality of Mongolia’s coal endowment.”
Aspire is expected to deliver an updated Early Development Plan Pre-Feasibility Study on its world-class, JORC-compliant 281.1 million tonnes Ovoot Coking Coal Project this month.
The company also has the smaller Nuurstei Coking Coal Project.
READ: Aspire Mining is fast-tracking a world-class coking coal project
Mongolian road delivery of coal is unaffected by China’s seaborne import control programs.
IHS Markit says many anticipate some form of control over seaborne imports will be exerted by China at various stages this year, with Beijing said to have adopted a policy of limiting seaborne imports at around 2017 levels.
China cut coking coal imports from Australia by 9% on the year in 2018, to 28.23 million tonnes from 30.98 million.
This came as China’s intake from Mongolia increased by 5% to 27.68 million tonnes from 26.30 million.