Mongolia AND China,rich with coal,seeks more next door in Mongolia to meet its energy needs

Mongolia AND China,rich with coal,seeks more next door in Mongolia to meet its energy needs-Overlooking a deep black gash in the Gobi Desert,Od Jambaljamts watched Caterpillar trucks rumble across the rim of the world’s biggest undeveloped coal deposit— and mused on Mongolia’s good fortune to have the world’s most voracious consumer of coal just a few scores of miles away.“China is so big that even if they cut their economy in half they will still need what we have here,”said Od,a former Mongolian diplomat in Washington who, along with his younger brother,now controls the Mongolian Mining Corp.

With China so close and so hungry for energy —and Mongolia so rich in what China needs — locals with mining licenses and a swelling swarm of foreign investors believe that only the absence of modern transport links to China clouds Mongolia’s future as a would-be Saudi Arabia of coal.
It should therefore have come as good news when Mongolia recently started preparations for a new railway line from Tavan Tolgoi, the first such link with the epicenter of this landlocked nation’s nascent,China-driven mining boom.
But there is a problem: The new track will not go to China. Instead, it will head hundreds of miles in the opposite direction toward Russia — and carry a heavy freight of suspicion and wariness that impedes China’s global quest for energy.

China’s demand for the coal,uranium and other minerals that Mongolia has in abundance — but has so far barely touched — is gargantuan and growing. China, which surpassed the United States as the world’s biggest energy user in 2009, needs to find enormous quantities of new fuel to meet what, according to the International Energy Agency, will be a 75 percent increase in its energy needs by 2035.

But as China scours the globe for coal, oil, uranium and natural gas — and hunts for rivers just beyond its borders on which to build electricity-generating dams — it increasingly confronts a stubborn reality: What Beijing and foreign businessmen embrace as a simple law of supply and demand stirs complex, and sometimes dangerous, political passions, security fears and big power rivalries.

“In the 21st century, whoever controls energy controls everything,” said Sanjaasuren Oyun, a member of the Mongolian parliament,Cambridge University-educated geologist and former foreign minister. She says that Mongolia needs a railway to the Chinese border but that it has to make sure the country doesn’t just become a grab bag for China-bound minerals.

Mongolia last year nearly doubled its sales to China, which absorbed 84 percent of all its exports —three-quarters of which were coal and other minerals.But this is just the start. The vast bulk of Tavan Tolgoi is still untouched and eagerly eyed by Chinese, Russian and American companies that want to profit from China’s insatiable demand. Mongolia could multiply its coal exports across its southern border many times over — if only it could get the stuff there swiftly and cheaply.
Coal is transported in convoys of trucks across unpaved desert tracks,a method that is expensive,slow and hazardous.

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