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Mongolian coal industry and CHPP status

Mongolian coal industry and

CHPP status

Magsar BM.Bazarragchaa1 Jargalsaikhan Zoljargal1,

Gendeekhuu Davaatseren2, Boldbaatar Serdamba3,
Tsagaanchuluun Ankh-Od4, Unurbaatar Nyamaa4 and D.Nyamdavaa5
1
Mongolian Coal Association
2 Buljikh Mineral Mining LLC
3 The University of British Columbia
4Erdenes Tavantolgoi JSC
5
Senior Specialist of Project Management and Development Department, Erdenes Tavantolgo JCS,
nyamdavaa.d@erdenestt.mn

ABSTRACT
Coal is the main source of export income in Mongolia along with copper, gold, iron ore, and
fluorspar. Also, it is the main fuel for the generation of electricity and heat in energy coal power
plants as well as for heating residential householdsaccounting for over 90 percent of domestic
energy generation from coal.
Mongolia has started exporting coal since 2002. The total coal production of the country has
doubled over the last decade. This increase was caused mainly by export growth, becoming the
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supplier of one third of the coking coal import of China, while the domestic consumption of the
country has not changed significantly.
The coal export of Mongolia is characterized by high variation year by year. It is true that the
Covid-19 affected significantly in the last three years but in other years coal export has been
also varying significantly depending on market demand, operation of customs, weak transport
infrastructure and logistic regulations.
Taking into account the large proven reserves of Mongolian coking coal deposits, the trend of active
development of infrastructure, and the improvement of coal quality with the introduction of new
coal washing capacities, it can be concluded that coal export will stay the major export income for
Mongolian economy for the next decades.

Keywords: Mongolian coal industry, coal preparation, dry processing, wet plant, transportation

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COAL RESOURCES
Mongolia has about 173 billion tonnes of coal, distributed among fifteen basins and three
fields. Mongolia has both energy coal and coking coal deposits, and their economic value and
infrastructural surroundings are significantly varied. Estimated coal resources of coal by A+B+C1
classification were 34 billion tonnes.

Figure 1: Mongolian coal type and distribution (Mineral Resources and Petroleum Authority)

COAL PRODUCTION
Main coking coal miners are Erdenes Tavan Tolgoi JSC, Mongolian Mining Corporation (Energy
Resource), Tavan Tolgoi Shareholding Company, Mongolyn Alt (MAK) LLC, South Gobi Sands (SGS)
LLC, Usukh Zoos LLC, Terra Energy LLC and MoEnCo LLC. Over 90 percent of coal export belongs to
these major companies of various ownership structures including state-owned, privately owned, and
joint stock companies.
By 2022, there are 177 companies which own 302 coal licenses. Due to various reasons, including
Covid-19, a number of the actively operating coal mines is forty-four by 2022, including seven
mines owned by the state, twenty-one mines owned by domestic and joint investors, and thirteen
companies fully owned by foreign investors.

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Figure 2: Schematic diagram of Mongolian coal mining industry

(Mineral Resources and Petroleum Authority of Mongolia, 2021)

Coal production in the country has increased by 5 to 10 million tonnes annually since 2015.
Currently, coking coal is being mined at a relatively low cost by open pit coal mining method. In the
coming years, open pits will be deepened down which will increase the operational costs. There are
currently no underground coal mines in Mongolia.
In addition, coal seams with multiple thin layers of rocks will be mined in larger volumes. Therefore,
the number of coal handling and preparation plants is expected to grow. In recent years, the
stripping ratio of coal mines in Mongolia has increased from about 3:1 to over 5:1, and therefore the
cost of mining is expected to increase as well. But still the cost will be the lowest in the region.

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Figure 3: Mongolian coal production and consumption in 2019

COAL EXPORT
According to the Mineral Resources and Petroleum Authority of Mongolia, coal mining companies
planned to produce 92 million tonnes of coal in 2020. At the end of the year, the total production
reached 43 million tonnes, out of which 28.6 million tonnes were exported. Compared to the same
period in 2019, production decreased by 24.6%, sales by 12.9%, and exports by 15.3%, mostly due to
Covid 19 (Mineral Resources and Petroleum Authority of Mongolia, 2021).

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In 2020, Mongolia planned to export 42 million tonnes of coal. In fact, according to statistics of the
General Customs Administration, the volume of coal exports reached 28.6 million tonnes. Export
decreased by 7.9 million tonnes or by 21.6% compared to the same period of the previous year. By
the end of 2021, the total production of coal was 32 million tonnes, from which 15.9 tonnes of coal
were exported. The export reduced gradually due to Covid-19.

Figure 4: Mongolian coal production, domestic consumption and export

COAL MINING COMPANIES

Currently, there are 44 active coal mining companies in the country. Of those, twelve major coal
mining companies have a total capacity of 91 million tonnes per year according to the feasibility
study reports of those coal mines. This means that only about 1/5 to 1/3 of the capacity has been
realised. The below figure shows the location and coal types of twenty-six coal exporting companies
in Mongolia.

Figure 5: Coal exporting companies

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Table 1: Coal exporting companies and types of coal

No Company Deposit Type of exported coal

1 Erdenes-Tavantolgoi JSC Tavan Tolgoi, East tsankhi ROM coking coal

2 Erdenes-Tavantolgoi JSC Tavan Tolgoi, West tsankhi ROM coking coal

Tavan Tolgoi, Ukhaa
3 Energy Resource LLC Coking and energy coal
Khudag, Baruun naran
4 Tavan Tolgoi JSC Tavan Tolgoi ROM coking coal
Semi soft coking coal, ROM
5 Mongolyn Alt (MAK) LLC Nariin Sukhait
and washed
6 Khuren Tolgoi Coal Mining LLC Nariin Sukhait Semi soft coking coal
Semi soft coking coal, ROM
7 South Gobi Sands LLC Nariin Sukhait
and washed
Semi soft coking coal, ROM
8 Usukh Zoos LLC Nariin Sukhait
and washed
9 Tsagaan Uvuljoo LLC Baruun Nyon uul Semi soft coking coal
10 Javkhlant Ord LLC Zangat Uul Semi soft coking coal
11 MoEnCo LLC Khushuut ROM coking coal
ROM coking coal; Washed
12 Coal LLC Ail Bayan
coking coal
13 Sor Gobi LLC Dadiin Khar Tolgoi Semi soft coking coal
14 Khangad Exploration LLC Baruun Naran Washed coking coal
15 Enkh Tunkh Orchlon LLC Khar Tservegen Semi soft coking coal
16 Andiin Ilch Bayantsogt Energy coal
17 Badmaarag kharsh LLC Bayantsogt Energy coal
18 Buman Olz LLC Khuut Energy coal
19 Erdeniin Bosgo LLC Khulman Nuur Energy coal 7A
20 Shtain Coal LLC Alag Togoo Energy coal
21 Friendship resource LLC Alag Togoo Energy coal
22 Gobiin Shandast khuleg LLC Alag Togoo Energy coal
23 Nagaraanz LLC Tukhum Energy coal
24 Premium Coal Corporation LLC Tukhum Energy coal
25 Arvijikh Energy LLC Alag Togoo Energy coal
26 Redhill Mongolia LLC Ulaan-Ovoo Energy coal

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COAL QUALITY
Among the twelve main coking coal mining companies of Mongolia, four mines produce coking
coal, five mines produce semi-soft 1/3 coking coal and two mines produce anthracite. Currently,
Mongolia exports mostly unwashed ROM coal. However, the Government of Mongolia is pursuing a
policy to increase the share of washed coal to maintain the quality of coal at a constant level, reduce
transportation costs and increase export revenues.
These companies are also actively investing in coal washing projects. Consequently, the sales of
washed coking coal will increase while sales of coal classified as energy coal will be decreased. It may
also improve the average quality of Mongolian coal in the international market.

Table 2: Average quality parameters of exported coal

(Mineral Resources and Petroleum Authority of Mongolia, 2021)

Coal Name Classification Port Name of mine Total Ash, (ar) Volatile Sulphur Caloric FSI Coking
type Moisture % matter, (%) value, index, G
% (daf) Qar kcal/
% kg

Khangi Ail bayan 11.6 12.3 22.2 0.7 6539 7.5 98

ETT, West, East
Coking coal Gashuun 4.1 19.9 28 1.71 7156 9 92
tshankhi
sukhait
ETT, Seam 4 4 14.1 27.3 0.95 6869 8.5 97

Khangi Dadiin Khar 4.2 8.3 24.5 0.4 7011 7.5 80

Gashuut
Sub Semi soft TT JSC, Seam 8 3.4 26.4 32.1 1.32 5713 8.5 96.3
Sukhait
Bituminous coking coal
Shivee Baruun Noyon 1.8 13.5 32.5 0.55 7103 6.0 96
khuren MAK 3.4 10.4 33.5 0.62 6854 4.0 61
ROM
ETT,
2.8 15.3 30.3 1.21 7682 0 0
Energy coal
Gashuut Sukhait
TT JSC,
Energy coal 4.6 19.4 26.1 0.59 6423 0 0
Energy coal
Shivee
Khuren Shand 3.4 26.3 31.4 0.92 5739 0 0
khuren

Zamiin Alag Tolgoi 12.6 16.0 41.3 0.87 5433 0 0

Other
uud Dalan PSR 4.6 29.7 43.8 1.53 4839 0 0

Lignite Bichigt Andiin Ilch 24.7 16.2 44.5 1.7 4114 0 0

Khangi Ail Bayan 3.0 6.3 19.9 0.74 7691 8 100

Washed Sub
Coking coal Gashuut
coal bituminous Ukhaa Khudag 8.5 10.2 25.3 0.68 6852 8 80
Sukhait

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WET PREPARATION PLANTS

Mongolian first and biggest wet preparation plant built in 2011, with a capacity of 15 Mt/a
(3 modules) by Energy Resources LLC (Stringfellow et al 2012). This plant washes Tavan Tolgoi and
Baruun Naran coking coal as a blend.
The average yield is around 50%. By 2022, there are twenty-one wet preparation plants in Mongolia
with a total installed capacity of 32.45 Mt/a. The most common capacity of newly built wet
preparation plants is 1 Mt/a and technology is based on jigging. The lowest clean coal ash achieved
6% in MAK Nariin Sukhait coal washing plant with heavy media cyclone technology.

Table 3: List of wet preparation plants in Mongolia

No Company, coal type Province, sum Capacity, Mt/a

1 Energy Resource LLC, Coking, semi soft Umnugobi, Tsogt tsetsii 3 lines x 5 = 15
2 El Power LLC, Coking Umnugobi, Tsogt tsetsii 1.2
3 Tumen Zag LLC, Coking Umnugobi, Tsogt tsetsii 1
Mongolian Coal Cleaning LLC, Re wash the
4 Umnugobi, Tsogt tsetsii 0.3
tailing pond
5 Oyut Bolor Erdene LLC, Coking Umnugobi, Bayan Ovoo 0.2
6 Ih Gobiin Ilch LLC, Coking Umnugobi, Tsogt tsetsii 0.2
7 ENK LLC, Coking Umnugobi, Tsogt tsetsii 1
8 Strato LLC, Coking Gobisumber, Shivee gobi 1.5
9 Mongolyn Alt (MAK) LLC, Semi soft Umnugobi, Gurvantes 1
10 South Gobi Sands LLC, Semi soft Umnugobi, Gurvantes 2 lines = 1.2
11 Usukh Zoos LLC, Semi soft Umnugobi, Gurvantes 1.5
12 Achir LLC, Energy coal Dornogobi, Dalanjargalan 1.2
13 RenZen Hou LLC, Energy coal Dornogobi, Dalanjargalan 0.9
14 Davkhar Amjilt LLC, Energy coal Dornogobi, Dalanjargalan 0.35
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15 Gobiin Shilmel Zam LLC, Energy coal Dornogobi, Dalanjargalan 1.5
16 Fengshu Zun LLC, Energy coal Dornogobi, Dalanjargalan 0.5
17 “Dungli” LLC, Khuut Energy coal Dornogobi, Bayanjargalan 0.3
18 Coal LLC, Coking Dornogobi, Mandakh 1.5
19 Dragon International LLC, Semi anthracite Dornogobi, Saikhan dulaan 0.5
20 Shariin Gol JSC, Energy coal Darkhan Uul, Shariin Gol 0.6
Big Mogul Coal and Energy Company,
21 Dundgobi, Bayanjargalan 1
Energy coal
Total 32.45

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Figure 6: 15 Mt/a wet preparation plant of Energy Resources LLC

(Mongolian Mining Energy Resources LLC, 2023)

Figure 7: 1 Mt/a wet preparation plant of Mongolyn Alt (MAK) LLC at Nariin Sukhait coal mine

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Table 4: Wet process plant technological comparison

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DRY PREPARATION PLANTS

The first dry preparation plant was built in 2008 by MAK. Most of Mongolian coal mines are in the
Gobi where the water is most important issue for the development of the coal industry. Due to this
factor, eleven companies have built dry preparation plants using Chinese technology with a total
installed capacity of 19.75 Mt/a. Dry process separates stones from ROM coal and to a certain extent
reduces the ash and sulphur content of the coal.

Table 5: List of dry preparation plants in Mongolia

No Company, coal type Province, sum Capacity, Mt/a

1 Mongolyn Alt (MAK) LLC, Semi soft coking Umnugobi, Gurvantes 4.0

2 Usukh Zoos LLC, Semi soft coking Umnugobi, Gurvantes 0.5

3 South Gobi Sands LLC, Semi soft coking Umnugobi, Gurvantes 9
4 Golden Traingle LLC, Tavan Tolgoi coking Umnugobi, Tsogt Tsetsii 0.5
Umnii Gobiin Diamond LLC, Tavan Tolgoi
5 Umnugobi, Tsogt Tsetsii 0.3
coking
6 Rongyuan Trade Co.,Ltd, Tavan Tolgoi coking Umnugobi, Tsogt Tsetsii 0.5
7 Tavan Tolgoi JSC, Tavan Tolgoi coking Umnugobi, Tsogt Tsetsii 1
8 ENC LLC, Tavan Tolgoi coking Umnugobi, Tsogt Tsetsii 0.5
9 MoEnCo LLC, Khushuut coking Khovd, Darbi 3
10 Tethys Mining ”LLC, Khushuut coking Khovd, Darbi 0.25
Dragon International LLC, Alag Undur Semi
11 Dornogobi, Saikhandulaan 0.2
anthracite
Total 19.75

Figure 8: Mongolia’s first dry preparation plant 0.5 Mt/a of Mongolyn Alt (MAK) LLC
at Nariin Sukhait coal mine

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Figure 9: Mongolia’s first dry preparation plant 0.5 Mt/a of Mongolyn Alt (MAK) LLC at Nariin Sukhait coal mine

NEW PROJECTS
In the next 5 to 10 years several wet and dry preparation plants are expected to be built by
Mongolian coal mining companies. The biggest project is 30 Mt/a CHPP of Erdenes Tavan Tolgoi
JSC. The project FEED was completed in 2021 and construction of the first 10 Mt/a phases of the
plant started in June 2022. If all listed projects are completed, the total coal preparation capacity
of Mongolia may reach 119.2 Mt/a including 83.45 Mt/a of wet and 35.75 Mt/a of dry preparation
plants.

Table 6: List of coal preparation projects for period of 2023-2026

Subtotal,
Company Wet, Mt/a Dry, Mt/a
Mt/a
Erdenes Tavantolgoi JSC 30 9 39

Mongolyn Alt (MAK) LLC 2 2 4

Aspire Mining Limited 5 5
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Terra Energy LLC 1 1 2
MonEnCo LLC 1.5 1.5
Tethys Mining LLC 1.5 1.5
Tavan Tolgoi Tulsh LLC 2 2
South Gobi Sands LLC 3 3
Usukh Zoos LLC 1 1
Gobi Coal and Energy LLC 8 8
Sub-total 50.5 16 66.5
Plant (existing) 32.95 19.75 52.7
Total 83.45 35.75 119.2

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Figure 10: 30 Mt/a CHPP project of Erdenes Tavantolgoi JSC

(10 Mt/a under construction)

CONCLUSIONS
Mongolia has 173 billion tonnes of coal resources and 34 billion tonness of proven reserves. Within
the last decade coal production as well as coking coal export to China roughly doubled, however in
the last three years it has dropped gradually due to strengthened custom clearance to China due to
the Covid-19 pandemic.
All coking coal is produced by open pit mines. In the coming years, open pits will be deepened down
which will increase operational costs. In addition, coal seams with multiple thin layers of rocks will be
mined in larger volumes. Therefore, the number of coal handling and preparation plants is expected
to grow. In recent years, the stripping ratio of coal mines in Mongolia has increased from about 3:1
to over 5:1 per tonne of coal, and therefore the cost of mining is expected to increase as well. But still
the cost will be the lowest in the region.
The combined capacity of operating coal mines is 150 million tonnes with an expectation of
another 50 million tonnes of capacity by 2035. The production is limited by market and transport
infrastructure. There are twenty-one existing wet preparation plants with the total capacity of 32.45
Mt/a, and eleven dry preparation plants with the total capacity of 19.75 Mt/a. In the next five years,
the total capacity of wet and dry coal preparation plants in Mongolia is expected to reach 119.2 Mt/a
due to plans of major coal companies to invest in coal preparation. Construction of the biggest coal
preparation plant of ETT has started recently.
The investors foresee improved coal quality, higher prices and lower royalty tax for washed coal, but
the issue is water scarcity in the Gobi where the biggest coal mines are located.

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REFERENCES
Energy Resources LLC (2020) “Feasibility Studies of coal mines Mongolyn Alt (MAK) LLC in 2018”.
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[Accessed 1 February 2023].
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