Erdenes Tavan Tolgoi (ETT) is one of the major coking coal producers worldwide. Can you introduce the company?

ETT is the largest state-owned mining enterprise (SOE) and leading coal producer in Mongolia, and it has been in operation since 2010. The total resource base is estimated at 7 billion t as per an independent assessment conducted by Stantec, a US-based international consulting firm, in 2020. The Tavan Tolgoi mine, comprised of six coal fields, is located in the South Gobi region. Overall, the annual coal production fluctuates, but this year ETT produced 30.5 million tons, which represented about half of Mongolia’s total coal exports this year. For 2024, we plan to maintain a minimum production rate of 30 million t/y and continue to invest heavily in infrastructure and value-adding projects to be able to ramp up outputs. Can you elaborate on the investments planned by ETT?

ETT is actively advancing 11 projects which span three areas: 1) Increase coal extraction by investing in research and development and technology and introducing a low-cost coal conveyor system; (2) Boost coal production capacity by constructing a coal handling and preparation plant (CHPP), 450-MW thermal power plant, and so forth; and 3) Expand the rail transportation network, including the rail connection between Mongolia and China. The projects amount to a total capital expense of US$5.2 billion altogether, US$1.8 billion out of which was deployed as of September 2023. What is the expected deadline to complete these projects?

The CHPP is 60% complete and scheduled to come into operation by May 2024. The Tavan Tolgoi-Gashuun Sukhait railway will be operational in early 2024 once rolling stock arrives. Meanwhile, we prepare to proceed with the rail connection, coal conveyor system, and power plant and as we anticipate, they will take about three years each once construction starts. With 7 billion t of coal in the ground, what is the life of mine (LoM) of the Tavan Tolgoi resource at the current production rate?

So far ETT has extracted about 2% of the total coal resource. Two out of our six coal fields are currently in operation, with one more being in development in the feasibility study phase. We are now completing feasibility study for a 400-million tons coal mine, which is anticipated to have a LoM of 30 years. The remaining three fields are in development phases, while exploration continues to increase the resource base. There is no doubt that the ETT assets will be mined for decades. What is your long-term view on the role of coal in the country’s future?

Coking coal that ETT mines is of high quality and grade and much sought after in the market. The viability of ETT operations is tied to the performance of steel makers in the region, including China. The ETT long-term goal is to go beyond coal exports and become a key player in the coal value chain. While the CHPP will enable us to engage in the processing industry and supply coal products, such as gas and chemicals, the thermal power plant will consume coal for energy production in the local market. What are the major challenges faced by ETT?

Since Mongolia is a landlocked country, one of the major challenges the company currently faces is logistics. The green energy transition has some impact on ETT business. Consistent government policy is the key to ETT success. What is the vision of the ETT management and how do you ensure better transparency?

The current management has been instrumental in managing to our triple exploration, expand coal sales by 3.8%, and increase transportation volume by 3.5%. I combine and dedicate my background in banking and finance and the business experience I gained in mining to better the economic and social progress for both the company and the country. The outlook is positive with Chinese buyers and end-users in the market and ample opportunities for growth in the years to come. I am confident we can successfully deliver on all the projects and goals ETT has set as we prepare to enter the next stage of coal production through the processing industry and using clean coal technology.