JAKARTA/CHENNAI, Jan 3 (Reuters) - Indonesian coal miners are seeking a quick resolution to a government coal export ban that is already causing fuel prices to rise and could disrupt the energy needs of some of the world's biggest economies.

The world's biggest exporter of thermal coal on Saturday banned the shipments because of concerns it could not meet its own power demand. But the prohibition risks undermining the energy needs of global economic linchpins China, India, Japan, and South Korea, which together received 73% of Indonesian coal exports in 2021, according to shiptracking data from Kpler.

Though key coal trading hubs such as Australia are closed on Monday, prices for coal to India's west coast have already climbed by as much as 500 rupees ($6.73) per tonne since the ban was announced, said Riya Vyas, a business analyst at iEnergy Natural Resources Limited.

But, she did not know of any exporters who had declared force majeure, which describes when companies cannot supply fuel because of events beyond their control.

The ban follows a tumultuous year for global coal as prices surged amid a supply crunch in China, the world's biggest consumer. Prices of the most commonly exported grade of Indonesian coal rose to a record $158 per tonne in October thought it slipped $68 on Dec. 29, according to data from Caixin.

Ridwan Jamaludin, the director-general of minerals and coal at the Indonesian energy ministry, said at the weekend that without the ban almost 20 power plants would have to shut.

Under its so-called Domestic Market Obligation (DMO) policy coal miners must supply 25% of their annual production to state utility Perusahaan Listrik Negara (PLN) at a maximum price of $70 per tonne, below current market prices.

The Indonesian Coal Mining Association (ICMA) met trade ministry officials during the weekend to thrash out a solution, ICMA Chairman Pandu Sjahrir said on Monday.

"The main objective now is to avoid power outages. For the very short term, the solution is for ten of our biggest members to try to help with PLN's shortage," he said.

The ICMA called for the ban to be revoked since it was "taken hastily without being discussed with business players".

Shares of Indonesia's coal miners fell early on Monday. Adaro Energy (ADRO.JK) dropped 3.1%, while Bukit Asam (PTBA.JK) lost 3.3% and Bumi Resources shed 2.9%. However, Adaro shares later rebounded.

Pandu said some miners are unable to sell to PLN since the company requires coal with a heating value of 4,200 kilocalories per kg or less, which is considered a low-grade form of the fuel.

A spokesperson for Adaro, one of Indonesia's biggest coal miners, said that in 2021 it sold about 27% of its output domestically, more than required.

Analysts expect the miners' willingness to do whatever it takes to restore export flows would lead to a quick resolution, especially since they have abundant supply capacity.

"I believe total monthly output from Indonesian mines is just below the 40-million-tonne mark, which would represent roughly a third of annual domestic demand. As such, it's difficult to envision this dragging on for more than a few weeks," said coal market analyst Matt Warder of Seawolf Research.

The ICMA is concerned about potential disputes with buyers if producers declared force majeure because of the ban.

The industry ministry of South Korea said there were likely to be some delivery delays, but expected that 55% of January coal shipments from Indonesia that had been loaded will be delivered on time.

"While the ministry expects Indonesia's coal export ban would have limited short-term impact, considering the country's (South Korea) coal inventory and coal shipments from other countries, including Australia, we need to closely monitor developments," the ministry said.

Coal buyers in India, which accounted for over 15% of Indonesia's coal exports in 2021, expect some re-routing of shipments from other suppliers if the ban persists.

"We might see coal from other origins such as Australia coming to India and diversion of vessels going to other countries in the region such as Bangladesh coming to India, if India pays a higher price," said iEnergy's Vyas.

Other analysts said to wait and see if Indonesia changes course on Wednesday. "Of course there have been knee jerk reactions, but people are waiting to see how this plays out," said Puneet Gupta of Indian coal trading marketplace Coalshastra.

But, steps to enact the ban are advancing with Indonesia's transportation ministry on Sunday issuing a temporary halt on vessels loading coal at ports.

Former Mongolian Champion E.Enkhbat passed away last weekend. E.Enkhbat who won international medals in the IJF World Tour fighting U90kg and U100kg was 37 years. He was a medalist at Asian Championships and reached the final of the IJF Grand Slam in Baku in 2013. The cause of the death of E.Enkhbat is unknown but the reactions on social media made clear that it was an unexpected death. After his judo career E.Enkhbat became a popular wrestler.

At the same time, Olympic champion N.Tuvshinbayar is being investigated for causing harm to E.Enkhbat in April of this year. A few days before Christmas a preliminary hearing on the case of N.Tuvshinbayar was held in Khan-Uul district court and the case was returned for additional investigation.

2008 Olympic champion N.Tuvshinbayar who is the current president of the Mongolian Olympic Committee had a previous detention and the restraining order will remain in place. The prosecutor will decide whether to continue the measure of restraint taken against N.Tuvshinbayar to transfer the case to the prosecutor.

Recalling the decision of the preliminary hearing, the Khan-Uul District Prosecutor’s Office filed a criminal case against N.Tuvshinbayar.

According to Article 33.3, Paragraph 1, Clause 1.2 of the Criminal Procedure Code, “the case was remanded to the district prosecutor’s office for investigation that could not be remedied by a court. The court upheld the previous detention of N.Tuvshinbayar until he went to the prosecutor’s office.

E.Enkhbat was a competitor of N.Tuvshinbayar who he met twice on the tatami of an international event. E.Enkhbat fought at World Championships in 2010 and 2011.

(Judo Inside)

Mongolian Prime Minister L.Oyun-Erdene said he will attend relevant activities of the Beijing 2022 Olympic Winter Games in February. Speaking at a meeting of Mongolia’s State Great Khural on Thursday, the Prime Minister said sports should not be politicized. Three Mongolian athletes will compete in the Winter Olympics.

The International Olympic Committee (IOC) President Thomas Bach has insisted the Beijing 2022 Winter Olympics will be “safe and secure”, while also reiterating his stance that the Olympic Games and the IOC must be “beyond all political disputes”.

The Games, which will see Beijing become the first country to host the Summer and Winter Olympics, are due to be held under substantial dispute, with China’s human rights’ record called into question.

Several countries, including the United States and Britain, will diplomatically boycott the Olympics, while the well-being of Chinese tennis player Peng Shuai has also been cited as a reason to criticise the Chinese Communist Party.

As of today (3 January, 2022 ), the first dose of vaccine has been given to 69.7 percent of the Mongolian population, and 66.5 percent of the population is fully vaccinated. 28.2 percent of Mongolians have been given the booster shot.

While many nations were grappling with the rapid spread of the highly transmissible delta variant, Covid-19 transmission in Mongolia declined sharply as the country vaccinated more than half of its population since February, 2021. Mongolia had one of the fastest vaccination rollout programs in the world, and by May, 2021 many of its coronavirus restrictions were lifted as new cases fell dramatically.

Just months ago, new cases had fallen to triple-digits, and there were some days in recent months where no new deaths were recorded.

Today, the country of 3.4 million has recorded 138 new cases of Covid-19; 11 of them were imported and 97 were in Ulaanbaatar. It was also reported that no new COVID-19 related death.

So far, Mongolia has 390,014 confirmed cases of coronavirus and 2,060 deaths.

With the 2,500th train transiting through Mongolia on December 30, Ulaanbaatar Railway was able to renew their achievement of the previous year. The 2500th journey was made by a train with 31 train cars en route Sukhbaatar - Naushki, which started its journey at 9.15 on December 30.

As a result of the improvements made in the trains’ capacity and usage, the freight of 2021 had an increase of around 40 thousand TEUs compared to the previous year.

The achievement shows that Ulaanbaatar Railway JSC has not only become an active participant in regional and international transport and logistics, but also a strong competitor in the land corridors connecting China and Europe.

It should also be noted that the number of trains passing through the territory of Mongolia for routes connecting Asia and Europe as well as China and Russia reached 2,312 in 2020, which set a new record for Ulaanbaatar Railway. As the railway company transported over 20 percent of the total freight transported between the two continents, the corridor of Mongolia was considered as the corridor with the highest annual growth rate.

Chile’s Centre for Copper and Mining Studies (Cesco) presented a document titled More and better mining for Chile before the constituents working on the country’s new Political Constitution, which should be subjected to a referendum by mid-2022.

Led by the Centre’s director Leopoldo Reyes, the presentation emphasized that even though Chile would be between 20% and 25% poorer if it didn’t exploit its mineral resources, the mining sector needs a new purpose that goes beyond increasing production because grades continue to lower and because the local industry has not been able to build a strong value chain that promotes sustainable development.

Considering that due to the climate change-driven energy transition, the world will need the equivalent of an additional 25% of Chile’s current copper production, Reyes said that the country has an opportunity to match its metal and mineral exports with the provision of knowledge, technology and services to international partners.

In his view and that of the nonprofit he leads, in order for Chile’s mining sector to step up its game, a model shift is needed. Thus, the new Constitution should emphasize that the Chilean state is the owner of the country’s mineral bounty and has the obligation to generate the greatest sustainable value by undertaking mining exploration and exploitation projects led by state-owned companies.

Such projects, however, could be run under a mixed model in which state-owned and private companies join forces to maximize results.

Concessions and royalties

When it comes to concessions, the Centre for Copper and Mining Studies proposes new legal measures that promote and guarantee that concessions are used as they were intended to. “In this sense, we propose modifications to the Qualified Quorum Law so that the obligations of concessionaires are laid out in a clearer manner,” the document states.

Cesco also poses the idea of creating more efficient mechanisms to collect rent and royalties from private companies, both local and foreign, keeping in mind that mining activities are capital-intensive, cyclical and long-term and that it is important to keep attracting investors.

For the organization, the existing Specific Tax on Mining needs to be raised so that the state can continue to invest in the sector, grow the country’s production capabilities and boost technological developments.

“The State should also invest or incentivize investments in activities that complement the exploitation of mineral resources, namely, science, technology and innovation, thus strengthening the value chain and the competitiveness of the metallurgical sector,” the document reads.

The final recommendations of the Centre for Copper and Mining Studies focus on working towards a greener future. It suggests that the government makes an effort to move away from fossil fuels and starts dealing with historical environmental liabilities. This means identifying and characterizing such liabilities, compensating those who have suffered due to the destruction of the natural environment and making efforts to restore the country’s natural assets.

Part of the new Silk Road railway is expected to boost international co-operation between China and ASEAN

A new section of the high-speed railway connecting Beijing and Hong Kong opened on Thursday, extending China’s overall high-speed rail network the length of the equator, at around 40,000 kilometers.

The new railway linking Anqing in East China’s Anhui Province and Jiujiang in East China’s Jiangxi Province has a designed speed of 350 kilometers per hour. It snakes down through rivers, lakes, urban main roads and other railways, according to the railway builder China Tiesiju Civil Engineering Group.

The 176-kilometer rail link will shorten the current four-hour journey from Nanchang in Jiangxi to Hefei in Anhui to around two hours. It will boost the railway network between provinces in Central China and help to develop the Yangtze River Economic Belt, the company said.

“China has both land border and coast line, high-speed railway is able to connect multiple international ports with inland provinces, and further accelerate international co-operation between China and ASEAN member countries,” Sun Zhang, a mass transit expert and professor at Shanghai Tongji University, told the Global Times.

Experts say China’s efficient high-speed railway system will play an important role in the implementation of the Belt and Road Initiative and the Regional Comprehensive Economic Partnership in the future.

The country is set to open an estimated seven additional high-speed rail links operating at 350 kilometers an hour in 2022, media report.

At its meeting, the Cabinet made a decision on spending of MNT 8.6 billion from the Government’s reserve fund.

From this, MNT 5.6 billion will be spent on the preventive measures to be carried out against the Omicron variant of COVID-19. The risk of the Omicron coronavirus variant spread is more than 2.5 times higher compared to the other variants. The Omicron variant, first detected by South African scientists, has spread to over 100 countries globally so far.

Moreover, MNT 3 billion will be allocated on the containerized shipping to be carried out from the container exchange area on the Mongolian-Chinese border to the Zamyn-Uud Customs Control Area.

It’s December 10, 1989. A Mongolian band sings “The Sound of a Bell” at Sukhbaatar Square — symbolically waking up the Mongolian populace and welcoming democracy. Around this time, the Soviet Union is on the edge of disintegration. Although Mongolia was never a Soviet republic, the decades-old strong relationship, planned economy, and heavy financial aid have abruptly shifted — leaving Ulaanbaatar to find its own democratic ways to develop, grow, and prosper.

The collapse of the Soviet Union was indeed a purview of Mongolia’s political, economic, and social transformation. Mongolia’s leadership, too, had to transform. For many decades, Mongolian intellectuals were educated in Marxist-Leninist ideology and policymaking. Between the 1970 and 1980s, students who would later become Mongolia’s leaders studied abroad in Moscow, St. Petersburg, Irkutsk, and Ulan-Ude. The ideological and practical transformation had to begin from the top.

Faced with the rise of popular protest and hunger strikes, the leaders of the Mongolian People’s Revolutionary Party (MPRP) refused to use force and were open to dialogue and negotiation. In an interview, the last leader of socialist Mongolia, J. Batmunkh stated “the demonstrations and the protests were something new to us. I gave them instructions that they should not use force under any circumstance. Any force shall not be used. There is no need to utilize the police or involve the military. The organizers of these movements and demonstrations should be responsible for social order. Actually, these demonstrators, participants, and protestors are our children.”

The resignation of J. Batmunkh’s government ended one-party rule in Mongolia. The emergence of Mongolia’s Social Democratic Party and the Mongolian National Democratic Party, together forming the Democratic Union Coalition, ushered Mongolia into a new era of a semi-parliamentary system. Mongolia’s first political change came in the 1993 presidential election. Mongolia’s first democratically elected president, Ochirbat Punsalmaa, wrote in his memoir “Time of Heaven,” that the June 10 edition of the French newspaper, Le Monde, said “Ochirbat has dramatically defeated his opponent, who had been nominated from the Communist Party.”

The singularity of the Mongolian revolutionary process deserves to be underlined. Nothing predestined the country to experience such a development at a time when the Soviet Union had not yet collapsed and so soon after China, a few months earlier, had crushed the revolt of its youth on Tiananmen Square.

The relative ease of the revolution was the result of a convergence between the reformers of the democratic movement and those within the dominant party. At the time, many agreed that change had to be profound to pull the country out of the doldrums of the 1980s, a decade of stagnation. Above all, many saw in the unfolding of events a historic opportunity to break with Soviet tutelage and to regain full independence and sovereignty. The events of the winter of 1989-1990, therefore, constituted a national revolution. It allowed Mongolia to fully assert its independence and sovereignty.

To fulfill the promises of the revolution, Mongolians progressively designed their own political and economic system. Mongolia’s democratization required a new constitution, replete with legislative and executive branches to support the country’s emerging outward-led economic policies.

Since adopting a new constitution — after two years of debate — Mongolian constituents agreed that the power should be distributed among the three branches of the state: the speaker of Parliament, the prime minister, and the president. Initially thought of as a semi-presidential system, the Mongolian political regime gradually evolved into a full parliamentary regime following two constitutional amendments adopted in 2000 and 2019. The choice of a parliamentary system was presented at the time as a tool to limit foreign influence on the Mongolian decision process.

The collapse of the Soviet Union hindered Mongolia’s economy, foreign investment, and joint projects at large. The abrupt change resulted in sudden privatization, liberalization of prices, and selling of all livestock. In addition, Mongolia was already facing a large sum of foreign debt with the Soviet Union.

Former Prime Minister P. Jasrai wrote, “Given Mongolia’s historical turning points, Mongolia became a member of COMECON [from the 1960s to the 1990s]. Because Mongolia was one of the weaker members of the economic group—in order to engage with others economically—it sought to attract foreign investment by receiving grants, soft loans, and establishing joint ventures. Although the construction project was not insignificant, in the end, the amount of foreign debt increased enormously.”

In order for Mongolia to rejuvenate its economy along the capitalistic school of thought, policymakers abandoned the planned economy. Moreover, to promote a new era of economic growth, Mongolian authorities chose a radical transition process based on the “shock theory.”

A gradual transition was difficult to envisage due to the structural dependency on the Soviet economy and the USSR’s Council for Mutual Economic Assistance (COMECON). The transition resulted in a violent economic crisis.

Mongolia’s GDP reached its 1989 level only in 2003, while the amount of foreign trade recovered its 1989 level in 2004. Unemployment and hyperinflation created social difficulties climaxing with the implementation of ration tickets in the early 1990s. Due to the importance of the crisis, the years after 1990 are considered a “lost decade” for Mongolia. Decision-makers had to capitalize on Mongolia’s comparative advantages, mainly the country’s natural resources, coal, and copper.

Moreover, at the end of the Batmunkh era, most COMECON countries faced similar economic challenges. This also meant competition for financial and economic resources. Mongolia sought to strengthen its already established diplomatic relations, mainly focusing on economic issues and seeking donor aid beyond Russia and China. Mongolia looked toward the four “Asian Tiger” economies — South Korea, Singapore, Hong Kong, and Taiwan — as examples of successful development models. Former Prime Minister Jasrai Puntsag wrote in his memoir, “If you were to say that Batmunkh only understood this in 1989, that will be a big misconception. Back in 1985, there was a new direction in Mongolia’s foreign policy. These years we initiated to strengthen Mongolia’s relations with Japan, China, and to establish bilateral relations with South Korea. We aimed to strengthen in economy and trade, science and technology, and development in humanities sector.”

The collapse of the Soviet Union and the abrupt democratic revolution deprived Mongolia of the security guarantees afforded it by the Soviet Union and forced it to ensure its own independence and the protection of its sovereignty. This situation led the authorities to formalize an innovative and original strategic response which plays on the democratic specificity claimed by Mongolia. This strategic approach is built around three priorities. First and foremost, Mongolian diplomatic endeavors aim to develop friendly relations with its two geographical neighbors, Russia and China. Mongolian diplomacy then focused on developing and strengthening privileged relations with democratic and developed countries, its “third neighbors.” In this pursuit, Mongolia has successfully secured strategic partnerships with Russia and China, and third-neighbor countries around the world in addition to its international peace-keeping operations.

As Mongolia recently celebrated the 110th anniversary of the establishment of Mongol diplomacy, the country is moving forward with a robust foreign policy that engages the country in both regional and global affairs. The collapse of the Soviet Union transformed Mongolia, but Mongolia’s peaceful democratic revolution remains the keystone of Mongolia’s multi-pillared foreign policy approach that secures Mongolia’s national interests.

AUTHORS

Bolor Lkhaajav

Bolor Lkhaajav is a researcher specializing in Mongolia, China, Russia, Japan, East Asia, and the Americas. She holds an M.A. in Asia-Pacific Studies from the University of San Francisco.

Antoine Maire

Antoine Maire is a researcher at the Fondation pour la Recherche Stratégique. He is an author of La Mongolie Contemporaine.

The delivery of about 2.35 million doses of Pfizer vaccines to Mongolia with the funding from the Government of Japan is successfully completed. The last batch of the vaccines arrived yesterday.

The Government of Japan has provided a total of US$ 21.6 million grant to Mongolia through the UNICEF to fight against the COVID-19 pandemic. With this funding, UNICEF has been providing technical, logistical and financial support to the Government of Mongolia in COVID-19 vaccination campaign, procurement of the cold chain equipment, expanding the vaccine storage facility, and vaccine stocks.

“UNICEF highly appreciates the generous financial support from Japan to support Mongolia in its effort to fight the pandemic. I congratulate the Government of Mongolia with the remarkable progress in vaccinating its people against COVID-19, in a timely manner. The Pfizer vaccines delivered through our collaboration helped the country immensely filling the gaps in vaccination” said Evariste Kouassi-Komlan, UNICEF Mongolia Representative.

“I would like to express my deepest gratitude to UNICEF and its staff for their hard efforts for implementing the projects. At the same time, I would like to praise health care workers and the Government of Mongolia for the relentless efforts to respond to the pandemic. I hope that the vaccines procured with Japan’s financial support will help bring COVID-19 pandemic under control, protect health of the Mongolian people and restore the social and economic situation in this country“ said Ambassador of Japan to Mongolia Hiroyuki Kobayashi.

In 2021, UNICEF has provided 46% of the total COVID 19 vaccines supply in Mongolia in partnership with the Government of Mongolia, Government of Japan and COVAX Facility.