Mongolia boosts coal exports to China by nearly 20% in 2025

Mongolia is set to significantly increase its coal exports to China in 2025, building on its current levels of nearly 84 million tons shipped in 2024. With the ambition to reach 100 million tons of coal exports, the government is optimistic about expanding its energy cooperation with international partners. Fundamental to this growth is a recent agreement between Mongolia and China, which facilitates the construction of a new cross-border rail link. This infrastructure project is expected to boost Mongolia's coal export capacity by an additional 30 million tons, ultimately aiming for a total capacity of 165 million tons. The Mongolian government recognizes the pressing need to diversify its energy sector and is actively pursuing initiatives aimed at enhancing cooperation with neighboring countries, particularly in renewable energy production and natural gas transit. One of their paramount projects is the Power of Siberia 2 pipeline, which aims to connect Russian natural gas resources to China through Mongolian territory. However, the construction of this pipeline has faced delays due to price negotiations between the involved parties, although Mongolia remains ready to facilitate the progression of this essential project. Furthermore, Mongolia’s wealth in natural resources has positioned it as a critical player in the global energy market, with over 90% of its exports stemming from these resources. In addition to coal, the government is exploring the potential of leveraging its vast coal reserves to produce hydrogen. This aligns with the growing global interest in hydrogen as a sustainable alternative fuel, particularly for heavy industries such as steel-making. Negotiations have already begun with countries in the Middle East regarding potential hydrogen exports, illustrating Mongolia's ambition to be more than just a coal exporter. As Mongolia pursues these ambitious goals, Prime Minister Oyun-Erdene Luvsannamsrai has emphasized the country's capability to produce energy due to its vast land and resources. By establishing solid international partnerships, Mongolia is set on a path to enhance its role in the energy sector, being able not only to serve the Chinese market but potentially extend its reach to other Asian nations as well. These developments indicate that Mongolia is taking substantial steps to strengthen its energy cooperation and diversify its exports, which will likely shape its economic future over the coming years.