Mineral exports increases in the first quarter www.zgm.mn
Mining exports, the key driver for Mongolia's economic growth, slightly picked up in the first quarter of this year. Mongolia's economy is dependent based on a few mining commodities. The exports of these minerals, such as coal and copper, constitute the main inputs of the nation’s revenue. The coal supply, which accounts for about 25 percent of Mongolia's total export revenue, jumped 15 percent to 7.8 million tons in the first three months of this year. The country earned USD 644 million from coal exports, which is USD 130 million increase from the same period of the previous year.
The export at the Gashuunsukhait-Gantsmod port, the main gateway for mining goods, was temporarily delayed in January and coal output dropped sharply as a result. Regardless, the coal supply was stable in the first quarter of this year.
Although coal exports increased in the first quarter of the year, a slow down in supply has been observed due to China's recent slowdown in exports, as well as the tightened customs control over the last few months. The same thing happened in 2018 and coal exports fell drastically for a short period. Specifically, coal export was temporarily suspended in November and almost put to a full stop in December. Mongolia intends to generate one-tenth of its budget revenue from coal. Although coal export is expanding, it remains uncertain whether if coal sales could reach MNT 1 trillion this year.
The export of copper concentrate, which is equally profitable as coal, increased by 7 percent to 361,400 tons in the first quarter. Mongolia exported 100 percent of its copper concentrate output to its southern neighbor China in the last quarter.
Another significant development was the growth in other commodities that make up lesser revenue compared to the previous two items have grown significantly. For example, iron ore export revenues increased by 66 percent to USD 106.5 million according to the National Statistical Office. Fluorspar export revenues increased by 62 percent to USD 40.5 million. Last year, Mongolia exported 110,600 tons of fluorspar and 69 percent of it exported to China and 30 percent to Russia. Only one percent of fluorspar was supplied to the Republic of Korea.
The Government is planning to launch the 2019-2024 action program to support the production of fluorspar production and export. The geological exploration study is about to exclude fluorspar resources in this sector. Accordingly, the industry experts are highlighting the need for revising the resource tax.