Erdenes-Tavantolgoi JS, the head of the largest state-owned coal miner in Mongolia says that it will cease signing direct coal contracts with buyers from China starting next month after protestors went to the street in the Mongolian capital last month to denounce rampant corruption in the country’s coal trade with China.
He says the company’s coal will be auctioned on the Mongolian Stock Exchange in response to protestors who accuse the company of corruption and fraud in the coal industry as a way to improve transparency and ultimately net higher returns for the state.
Gankhuyag Battulga, the company’s chief executive, and several associates, as well as family members, have been arrested and await trial after being accused of embezzling billions of dollars in coal revenue.
The government cut the time to start trading coal online from mid-year to February to help gain experience in selling coal on an online platform according to Batnairamdal, Mongolia’s vice minister for mining and heavy industry.
Magnolia has a population of 3.3 million people spread across a landscape where mining accounts for roughly a quarter of the country’s GDP with coal accounting for a half of its export revenue.
The affected companies include Energy Resources LLC, whose parent company Mongolian Mining Corp is listed on the Hong Kong Stock Exchange and exports coal through the Gashuunsukhait border post, located about 240km (150 miles) south of the Tavan Tolgoi coal deposit in the Gobi Desert.
Mongolia supplied China With 31.2 million tonnes, about 18 percent of the total of its coal imports in 2022 which is used in the production of steel.
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