Mongolia to up coal exports to China by 20% in 2025, expand energy sector

• Mongolia plans to increase its coal exports to China by nearly 20% in 2025, with a goal of ultimately reaching 165 million tons of export capacity. A new cross-border rail link between the two countries is expected to support this growth.
• Mongolia is also expanding its energy sector by pursuing projects such as the Power of Siberia 2 pipeline, linking Russia and China through Mongolian territory, as well as hydrogen exports to Middle Eastern nations.
• As natural resources account for over 90% of Mongolia’s exports and more than a quarter of government revenue, the country aims to strengthen its role in the global energy market through international partnerships.

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Mongolia is set to increase its coal exports to China by nearly 20% this year as part of a broader effort to strengthen energy cooperation with international partners. Prime Minister Oyun-Erdene Luvsannamsrai announced in an interview on Monday, Feb. 17, that the country anticipates coal exports will reach 100 million tons in 2025, up from the nearly 84 million tons shipped last year.

“Mongolia has vast land capable of producing energy,” Oyun-Erdene said. ”We can sell the energy to China and also other Asian superpowers.”

How will Mongolia export more coal to China?

The increase follows a recent agreement between Mongolia and China, which has paved the way for a new cross-border rail link designed to facilitate greater coal exports. The project is expected to add an additional 30 million tons of coal export capacity and is one of multiple railway connections that Mongolia hopes to build, with an ultimate goal of raising coal export capacity to China to 165 million tons.

What other moves is Mongolia making in the energy sector?

Beyond coal, Mongolia is also looking to diversify its energy sector and enhance cooperation with China and other countries in renewable energy production, hydrogen fuel and natural gas transit. One of the key initiatives the country is pursuing is the long-discussed Power of Siberia 2 pipeline, a proposed natural gas conduit linking Russia and China through Mongolian territory.

The project has faced delays due to price negotiations, but Mongolia said it remains ready to facilitate progress. Oyun-Erdene proposed to Chinese Premier Li Qiang the idea of hosting a trilateral meeting in the Mongolian capital of Ulaanbaatar to advance discussions following talks with Russian President Vladimir Putin.

“The Mongolian government is ready to sign the agreement and move forward with this project when the purchase agreement is concluded between Russian and Chinese state-owned firms,” he said.

Is Mongolia exploring energy exports with any other nations?

Additionally, Mongolia is exploring the potential of using its coal reserves to produce hydrogen, which is increasingly viewed as a sustainable fuel alternative for heavy industries such as steel-making. The government has engaged in negotiations with countries in the Middle East regarding possible hydrogen exports, highlighting its ambition to become a major player in the evolving global energy landscape.

What happens next?

Mongolia’s natural resources remain a crucial pillar of its economy, accounting for over 90% of its exports and more than a quarter of government revenue. With increasing global demand for these resources in the power sector, Mongolia is positioning itself in the international energy market in the coming years.