drilling for jorc, page-9

Mongolia on track to supply Asia with coal
The Australian 14 June 2012
http://www.theaustralian.com.au/business/opinion/mongolia-on-track-to-supply-asia-with-coal/story-fnciihm9-1226394879882

MONGOLIA is looming as a serious competitor for Australian mineral exports to northern Asia.

Already the landlocked north Asian state supplies 44 per cent of the coking coal imported by China, compared with Australia's 22 per cent market share.

But there is also the looming threat that a new railway could mean Mongolian coal can be supplied more cheaply and quickly to our large markets in Japan and South Korea.

It takes a bulk carrier up to 17 days to haul coal from Newcastle to a South Korean port. Once a proposed new Mongolian rail line is built it will take just three days to transport coal to ports in Siberia and just a few days sailing across the Sea of Japan.

Everybody, it seems, wants a piece of the Mongolian resources action. The latest mover is Singapore state investment agency Temasek, which has taken a 5.5 per cent stake in Canada's Ivanhoe Mines, 66 per cent owner of the huge Oyu Tolgoi copper-gold mine. Just weeks earlier, the Steel Authority of India inked a deal to gain access to coking coal and iron ore projects in Mongolia.

Standard Chartered says China is likely to seek increasing supplies of coking coal from its northern neighbour given its prices are cheaper (by about $US25 a tonne) than from the seaborne trade.

We've been overtaken by Indonesia as the largest supplier of thermal coals to China. Indonesia has used its closer proximity to Chinese ports to account for 35 per cent of China's thermal imports, leaving Australia in second place. Mongolia is coming up fast, with Standard Chartered expecting almost all of Mongolia's thermal coal output to be transported by rail to Chinese power stations.

But the biggest of all the projects is the plan to build a 1100km railway from the Tavan Tolgoi deposit in the southern Gobi desert to the Siberian coast to access the Japanese and South Korean markets. This deposit contains six billion tonnes of coal, 1.6bn tonnes of which are high-calorie coking coal.

Meanwhile, an Australian company, Aspire Mining, which claims to have the third largest coking coal resource in Mongolia, is to benefit from the new 406km Erdenet-Moron railway, which will carry the coal to the main trans-Mongolia line.

The top 10 deposits in Mongolia are said to have a combined minerals value of $US2.75 trillion.

But even smaller projects have been of interest in the big foreign players. The Japanese, for example, have been very active in trying to nail down rare earths projects in the country.