Mongolia

Mongolia:-

Cost: From the data that is know publicly, they sit in the midst of the cost curve (see screenshot, taken from the IEA, as of end 2020). However, notice that data is somewhat old. In 2018, Mongolia has started developing the largest remaining (known) untapped coking coal deposits, with estimated reserves of 7.4 billion tonnes. Key to make this wokr, however, is sufficient transport infra: Plan is to trnaposrt via rail & truck mainly to China, and to extend trasnportation capacities to Primorsky Krai, Posyet Bay - which is in Russia! Given the coal volumes they now can trasnprot to China, I guess that part of the infra has come online as planned. Don't know about the capacity to ship volumes however due to the war. But that will be crucial obviously to reach markets outisde China. (Not sure how/if they plan to reach India, which is set to become one of the world's key steel makers, and hence one of the key takers for met coal).

- Supply/Demand balance: Key question is, whther the influx of Mongolian coal will change the larger picture. Current assumption among all analysts I've checkd with is that supply will remain high enough that mid-term prices stay well below 200USD/metric ton (all tons in my write up are on metric ton basis). What we know with high likelihood though is that Mongoian coal is set to become the main source for met coal in CN, replacing Australia as main importer.

kind of goes against the perception that there are no new mines coming online