Mongolian coal industry exploration and recent situation

year region	о	8	8	8	О 8	8	О 8	о	8	8	Absolute average net growth of production, mil.tn
Europe&Euro-Asia	rq 9	oq 04	40	oq	OO	oq 04	04 40	40 40 9	9
Asia- Pacific	n ОО ri	OO s	$	40 04 oo	40 40 04	S	oq 0-1	Я	ri 04 ri	40 OO 40 ri	40
North America	04 40	04 OO	40	40	40	04 O1 40	to	oo	ri 04	o "О
Middle East &Africa	04	OO	9	9	9	9			9		ri
South and central America	04	04 04	о	40	n	40	■о	tn	n	°? 9

The Absolute average net growth of production is highest in the Asia-Pacific. The total coal production of Asia-Pacific is shown in the table 2.

From this table Republic of China is the biggest producers by 73%. Second one is Australia by 8.6%. I calculated production growth rate using data of appendix.2 by (1) formula and indicated in the table 2.

growth rate=(y n -y n-1 )*100/y n-1

table. 2

The coal exploration growth rate, % (at 2002 constant prices)

year Counttry	2003	2004	2005	2006	2007	2008	2009	2010	2011
Australia	2.8	6.8	11.6	14.4	17.8	21.6	25.9	28.1	25.2
Russian Federation	8.4	12.3	18.7	23.7	26.2	30.8	21.1	28.8	34.1
Indonesia	10.7	28.2	47.9	87.7	110.1	132.8	148.2	166.5	214.6
India	4.3	12.4	17.0	22.9	30.7	41.2	52.2	57.0	60.6
Thailand	-7.0	-1.8	1.8	-7.0	-10.5	-12.3	-12.3	-10.5	5.3
China	18.7	37.5	52.5	64.7	75.8	82.4	93.5	110.6	129.1
Vietnam	17.4	59.8	98.9	137.0	143.5	150.0	173.9	167.4	170.7
Japan	-12.5	-12.5	-25.0	-12.5	0.0	-12.5	-12.5	-37.5	-12.5
Republic of Korea	0.0	-6.7	-13.3	-13.3	-13.3	-20.0	-26.7	-40.0	-40.0
New Zealand	14.3	17.9	17.9	28.6	7.1	7.1	0.0	17.9	10.7
Pakistan	-6.3	-6.3	0.0	6.2	0.0	12.5	0.0	-6.3	-12.5
Mongolia	1.8	25.5	36.4	45.5	67.3	81.8	161.8	358.2	481.8
Other Asian countries	8.8	12.8	18.0	23.7	29.0	33.5	24.0	35.4	44.2
Asia- Pacific	14.0	29.4	42.0	53.5	63.2	70.5	80.9	94.6	109.7

The Australian coal production growth is decreased from the 2010 because of force major. The Mongolia became beginner of the coal production growth rate in the 2011, at 2002 constant prices. Second one is Indonesia and third one is Vietnam.

The Republic of China is a beginner of coal consumption. After that the coal consumption is a high in the India and Japan. I calculated production growth rate using data of appendix.2 by (1) formula and demonstrated in the table 3.

table.3

Total consumption growth rate,%(at 2002 constant prices)

	2003	2004	2005	2006	2007	2008	2009	2010	2011
Australia	-3.3	-0.6	4.7	9.6	5.9	6.8	6.7	-14.3	-2.5
Russian Federation	1.0	-3.4	-8.5	-6.1	-9.3	-2.5	-10.8	-12.4	-11.7
Bangladesh	0	0	0	25.0	0.0	50.0	50.0	125.0	150.0
Indonesia	34.4	23.3	41.1	67.2	110.0	67.2	92.2	128.9	144.4
India	3.3	13.5	21.5	28.7	38.5	51.8	67.2	78.4	94.7
Thailand	2.2	13.0	21.7	34.8	53.3	66.3	57.6	66.3	51.1
China	18.4	40.1	56.0	73.3	83.1	89.5	107.7	120.4	141.9
Vietnam	3.8	54.7	50.9	79.2	90.6	88.7	164.2	162.3	183.0
Japan	5.3	13.3	13.8	11.7	17.5	20.7	2.1	16.0	10.4
Republic of Korea	4.1	8.1	11.6	11.6	21.6	34.6	39.7	54.6	61.7
New Zealand	42.9	50.0	64.3	57.1	21.4	50.0	14.3	0.0	0.0
Pakistan	20.8	58.3	70.8	75.0	112.5	120.8	95.8	87.5	75.0
Hong-Kong	22.2	22.2	24.1	29.6	38.9	29.6	40.7	16.7	42.6
Mongolia	-5.5	-5.5	5.5	3.6	20.0	5.5	16.4	25.5	23.6
other Asian countries	8.9	14.8	21.9	26.0	27.5	30.8	28.6	36.4	36.5
Asia-Pacific	13.4	29.7	41.7	54.2	63.3	69.4	81.7	92.9	109.2

We can see that total coal consumption did not change because of the consumption decreased one side but increased another side.

The major exporters are Australia, Indonesia, India, Mongolia and Vietnam in the Asia-Pacific. The major importers are China, Japan, North Korea, Malasiya, Thailand and Philippines.

In the coal trade, the brown coal is 6.8 billion tonn, the coking coal is 2.7 billion tonn from the total export by 2010. The brown coal export is more than coking coal or 32%-40% above the coking coal export in the last few years.

The Indonesia became the biggest brown coal exporter. The Australia occupied 21% of brown coal export and 54% of coking coal export.

The market price is declined from 2005. It is respected or indentified world economic crisis. In my view. the world market price is rised again in the 2007 because of a coal is a primary energy deposit and cheap. Therefore, it is not lose its worth.

• III.    THE PRODUCERS AND CONSUMERS TREND IN THE DOMESTIC MARKET

Our coal geology deposit is estimated 163,2 billion tonn[5] and it is possible to rise. The coal deposit predicted and surveyed is around 20 billion tonn[6].(15 basin and 300 fields) Then we became one of the biggest coal deposit owner or Mongolia included in begining 10 coal deposit owner country. The coal is Mongolian majority energy source and aslo it will be kept out further.

We have divided our land into five region such as Central, “Khangai”, “Gobi”, “Western” and “Eastern” in the Mongolian regional development program[7]. In the western region has maximum fields which has 23 fields but the coal deposit amount is maximum in the eastern region[8].

In the Mongolian Congress resolution 2007 № 27 proved “About to consists into strategic field of mineral”[13] rule. From total 15 fields, it has 4 coal oriented fields: Tavantolgoi, Nariinsukhait, Baganuur and Shivee-Ovoo.

The 5 coal stock companies registered in the Mongolian Stock agency by 2009. It is increased in the 2011 and reached 8. [14] (Shivee-Ovoo, Baganuur, Tavantol-goi, Baynteeg, Mogoin-gol, Nako tulsh, Shariin gol, Taliin gal) It has been given 208 exploration licenses since 1992. Its pick period was a 2006. Exploration license owner research is illustrated in the graphic 4 and table 4.

graphic 4. The number of exploration licenses dynamic in the coal industry sector [11] 4

table. 4

The exploration licence, number of exploration lisence owner(2011 оны байдлаар)

number of exploration license	number of exploration lecense owner	The share of total
1	116	81.1
2	15	10.5
3	5	3.5
4	4	2.80
8	1	0.70
10	1	0.70
12	1	0.70
Total 208	Total 143	100%

From this table, There are 17 new companies and 6 old companies from the new registered exploration license companies by the last two years. The biggest exploration license owners are Mongolian gold(MAK) LLC, Erdenes-tavantolgoi LLC and MoEnKo LLC. The license exploration transition is demonstrated in the figure 5.

graphic 5. The exlporation license transition[12]

From this figure, the cancelled and extended fields are decreased and mortgage field is increased so much.

The gold exploration special permission is 1192 or biggest but the coal exploration area is 682.7 thousand hectare or 47.6% share of exploration special permission.

The Mongolian Mineral Resource Authority made many things that arrangement to giving process of mineral special permission and according to implement rule. From this result the number growth of the special permission, reduced by 100%. in between 2010-2011. But it raised up by 79.6% in between 2011-2012.

In the 2012, the operation lisence is increased 24.1% and the number of companies are increased 22.1% compired with 2008 data. Every year, the operation lisence number is increased by average 13[13]. We have 157 coal mining companies, in which 16 Stock company and 141 Limited Liability Companies. In the Mongolian stock market registered total 54 mining company, from this 5 Stock companies are goverment responsibillity.[14] (Shivee ovoo Stock company, Baganuur Stock company, Tavantolgoi Stock company, Baynteeg Stock company, Mogoin gol Stock company)

• ■    GDP growth rate

• ■    Coal exploration growth rate

• ■    Mining &quirring growth rate

graphic 1. The Coal exploration growth rate dynamic [15]

• ■    Coal exploration share in the Mining&Quirring

• ■    Mining&Quirring share in the Industrial total production

• ■    Idustrial total production share in the GDP

  graphic 2. The Coal exploration value share in the Mining &Q uirring,%(2011) [16]

The coal research department of the Mineral Deposit Authority classified to the coal exploration company by their operation goal that assumed energetic, territority and export oriented companies.

Although, Local area oriented companies are 57% share of total, their exploration is less than export orinted companies. Another word their performance is very low.

table. 6

Mongolian exploration and consumption growth rate, % (at 2002 constant prices)

year growth rate	2003	2004	2005	2006	2007	2008	2009	2010	2011
exploration growth rate	1.8	25.5	36.4	45.5	67.3	81.8	161.8	358.2	481.8
consumption growth rate	-5.5	-5.5	5.5	3.6	20.0	5.5	16.4	25.5	23.6

From above table we can see that the exploration rate increased 20(at 2002 constant prices) times from the consumption growth rate. According to predict absolute net growth rate trend level, we will use (2) formula. It can demonstrated in the table 7.

y 2= y 1+ д, y 3= y 1+ 2Д, y 4= y 1+ ЗД, y n= y 1+ (п-1)Д                         (2)

table.7

д

year country	2012	2013	2014	2015	2016	2017	2018	2019	2020
Australia	236.0	241.1	246.3	251.5	256.6	261.8	267.0	272.1	277.3
Russian federation	161.7	166.2	170.6	175.1	179.5	184.0	188.4	192.9	197.3
Indonesia	214.9	230.1	245.2	260.4	275.5	290.7	305.8	321.0	336.1
India	231.7	241.0	250.4	259.7	269.0	278.3	287.7	297.0	306.3
Thailand	6.0	6.1	6.1	6.1	6.2	6.2	6.2	6.3	6.3
Republic of China	2078.5	2200.9	2323.4	2445.9	2568.3	2690.8	2813.3	2935.7	3058.2
Vietnam	26.6	28.4	30.1	31.9	33.6	35.4	37.1	38.9	40.6
Japan	0.7	0.7	0.7	0.656	0.6	0.6	0.6	0.6	0.6
Republic of Korea	0.8	0.8	0.7	0.6	0.6	0.5	0.4	0.4	0.3
New Zealand	3.1	3.2	3.2	3.2	3.3	3.3	3.3	3.4	3.4
Pakistan	1.4	1.4	1.3	1.3	1.3	1.3	1.2	1.2	1.2
Mongolia	34.9	37.9	40.8	43.8	46.7	49.7	52.6	55.6	58.5
Other Asian countries	-154.1	-159.2	-164.2	-169.3	-174.4	-179.467	-184.5	-189.6	-194.7
Asia- Pacific	2842.4	2998.5	3154.7	3310.8	3466.9	3623.0	3779.2	3935.3	4091.4

If coal exploration growth rate is constant, it will be 4.91 billion tonn in the 2020.

table.8

year country	2012	2013	2014	2015	2016	2017	2018	2019	2020
Australia	49.7	49.5	49.4	49.2	49.1	48.9	48.8	48.6	48.5
Russian federation	89.6	88.2	86.9	85.5	84.2	82.8	81.5	80.1	78.8
Bangladesh	1.1	1.1	1.2	1.27	1.3	1.4	1.5	1.5	1.6
Indonesia	46.9	49.8	52.7	55.6	58.4	61.3	64.2	67.1	70
India	311.6	327.56	343.5	359.51	375.5	391.5	407.4	423.4	439.4
Thailand	14.4	14.944	15.5	16.0	16.5	17.0	17.6	18.1	18.6
Republic of China	1959.3	2079.2	2199.1	2319	2438.8	2559	2679	2799	2918.4
Vietnam	16.1	17.2	18.2	19.3	20.4	21.5	22.5	23.6	24.7
Japan	118.9	120.17	121.4	122.63	123.9	125.1	126.3	127.6	128.8
Republic of Korea	82.8	86.1	89.5	92.867	96.2	99.6	103.0	106.3	109.7
New Zealand	1.4	1.4	1.4	1.4	1.4	1.4	1.4	1.4	1.4
Pakistan	4.4	4.6	4.8	5	5.2	5.4	5.6	5.8	6
Hong-Kong	8.0	8.2	8.5	8.7	9.0	9.2	9.5	9.7	10
Mongolia	6.9	7.1	7.2	7.4	7.5	7.7	7.8	8.0	8.1
other Asian countries	75.8	78.0	80.2	82.4	84.5	86.7	88.9	91.1	93.3
Asia-Pacific	2701.3	2849.4	2997.4	3145.5	3293.6	3441.7	3590	3738	3885.9

The first one is Republic of China. After that India, Indonesia, etc., If coal consumption growth rate is constant, it will be 3.885 million tonn in the 2020.

The Glogex LLC predicted coal exploration and its revenue.(table.5 )

table. 5

Mongolian coal exploration trend coal exlporation, growth rate low, million. Tonn coal exlporation, growth rate high, million. tonn

201337.9

201440.8

201543.8

source: Гложекс LLC

CONCLUSION

The coal exploration is rised in the Indonesia, India, Thailand, Republic of China, Japan and Mongolia and the coal consumption is rised all Asia-Pacific region despite of Thailand and Japan in between 2010-2011.

The coal demand will rise future in the world because of every countries are refused nuclear energy. The China is a biggest explorer and also consumer. Mongolian advantage is a location, which is very close to the china. Also Mongolian coking coal deposit .

My prediction is the low than Glogex LLC (coal exlporation, growth rate low, million. tonn). For this moment, Mongolia can export 30 million tonn coal, if there is no any force major and growth rate is constant.

The World Energy forum made work plan 2012-2014, in which emphasized on activity to move into less evolve hydrocarbon which be less harm in the ecology and environment or low-carbon coal consumption. Therefore, consumers trend will change and it is necessity to improve coal producing technology and need to produce value added production.

APPENDIX

year Country 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2011 share of total Australia 184.3 189.4 196.8 205.7 210.8 217.1 224.1 232.1 236 230.8 8.6 Russian federation 117.3 127.1 131.7 139.2 145.1 148 153.4 142.1 151.1 157.3 Indonesia 63.5 70.3 81.4 93.9 119.2 133.4 147.8 157.6 169.2 199.8 7.4 India 138.5 144.4 155.7 162.1 170.2 181 195.6 210.8 217.5 222.4 8.3 Thailand 5.7 5.3 5.6 5.8 5.3 5.1 5.0 5.0 5.1 6.0 0.2 Republic of China 853.8 1013.4 1174.1 1302.2 1406.4 1501.1 1557 1652.1 1797.7 1956 73.0 Vietnam 9.2 10.8 14.7 18.3 21.8 22.4 23 25.2 24.6 24.9 0.927 Japan 0.8 0.7 0.7 0.6 0.7 0.8 0.7 0.7 0.5 0.7 0.026 Republic of Korea 1.5 1.5 1.4 1.3 1.3 1.3 1.2 1.1 0.9 0.9 0.034 New Zealand 2.8 3.2 3.3 3.3 3.6 3.0 3.0 2.8 3.3 3.1 0.115 Pakistan 1.6 1.5 1.5 1.6 1.7 1.6 1.8 1.6 1.5 1.4 0.1 Mongolia 5.5 5.6 6.9 7.5 8 9.2 10 14.4 25.2 32 1.2 Other Asian countries 14 14.7 15.2 17.3 17.3 14.7 15.5 14 11.2 8.3 0.3 Asia-Pacific 1281.2 1460.8 1657.3 1819.6 1966.3 2090.7 2185 2317.4 2492.7 2686.3 100% source: BP Statistical Review of World Energy full report 2012

• 2.    Total consumption of Asia-Pacific, million.tn

  year country	2002	2003	2004	2005	2006	2007	2008	2009	2010	2011	2011 share of total
  Australia	51.1	49.4	50.8	53.5	56	54.1	54.6	54.5	43.8	49.8	1.95
  Russian federation	103	104	99.5	94.2	96.7	93.4	100.4	91.9	90.2	90.9
  Banglades h	0.4	0.4	0.4	0.4	0.5	0.4	0.6	0.6	0.9	1	0.039
  Indonesia	18	24.2	22.2	25.4	30.1	37.8	30.1	34.6	41.2	44	1.723
  India	151.8	156.8	172.3	184.4	195.4	210.3	230.4	253.8	270.8	295.6	11.58
  Thailand	9.2	9.4	10.4	11.2	12.4	14.1	15.3	14.5	15.3	13.9	0.544
  Republic of China	760.4	900.2	1065.6	1186.2	1317.7	1392.5	1441.1	1579.5	1676.2	1839.4	72.04
  Vietnam	5.3	5.5	8.2	8	9.5	10.1	10	14	13.9	15	0.587
  Japan	106.6	112.2	120.8	121.3	119.1	125.3	128.7	108.8	123.7	117.7	4.61
  Republic of Korea	49.1	51.1	53.1	54.8	54.8	59.7	66.1	68.6	75.9	79.4	3.11
  New Zealand	1.4	2	2.1	2.3	2.2	1.7	2.1	1.6	1.4	1.4	0.055
  Pakistan	2.4	2.9	3.8	4.1	4.2	5.1	5.3	4.7	4.5	4.2	0.164
  HongKong	5.4	6.6	6.6	6.7	7	7.5	7	7.6	6.3	7.7	0.302
  Mongolia	5.5	5.2	5.2	5.8	5.7	6.6	5.8	6.4	6.9	6.8	0.266
  other Asian	53.9	58.7	61.9	65.7	67.9	68.7	70.5	69.3	73.5	73.6	2.883
  countries Asia-Pacific	1220.5	1384.6	1583.4	1729.5	1882.5	1993.2	2067.6	2217.8	2354.4	2553.2	100

  source: BP Statistical Review of World Energy full report 2012