The countries agreed to establish a new cross-border rail link to augment coal export capacity by 30mt.

Mongolia intends to bolster its coal exports to China by nearly one-fifth this year to deepen energy ties with its resource-dependent neighbour.

Mongolian Prime Minister Oyun-Erdene Luvsannamsrai announced that the country expects exports of the steel and power-producing fuel to increase to 100 million tonnes (mt) this year, reported Bloomberg.

This forecast follows a recent agreement between the two countries to establish a new cross-border rail link, which is expected to augment capacity by 30mt.

The new railway link is one of several connections that Oyun-Erdene hopes to develop to eventually increase Mongolia’s coal export capacity to China to 165mt, almost double the figure (nearly 84mt) exported last year.

The Prime Minister also expressed an interest in collaborating with China and other nations on various energy sectors including green power generation, hydrogen production and natural gas transit.

In addition to expanding rail infrastructure, the Mongolian Government is advocating for trilateral discussions with China and Russia concerning the Power of Siberia 2 pipeline.

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Mongolia also seeks to capitalise on its coal reserves by venturing into hydrogen production, a potential future fuel for heavy industries such as steelmaking.

The country has been in discussions with Middle Eastern countries about the potential export of its hydrogen to them, Oyun-Erdene revealed.

Despite a struggling steel industry and generally flattening demand for coal in China, Mongolia is strategically positioned to maintain or even expand its market share, particularly as Russian supplies have become more costly.

“Mongolia has vast land capable of producing energy. We can sell the energy to China and also other Asian superpowers,” Oyun-Erdene said.