Sojitz aims to triple Mongolian coal sales to China
Reuters reported that Sojitz Corp aims to more than triple Mongolian coal sales to China within three years as it seeks to handle 10% of the country’s growing sales of the mineral to the world’s top consumer.
Sojitz, Japan’s sixth biggest trading company, expects its acquisition of a 10% stake in Mongolian resources and coal distributor Inner Mongolia Zhongmeng Coal Co a unit of Inner Mongolia Erdos Group to help boost its China sales.
Chinese firms are collectively the world’s largest spot buyer of thermal coal, but their demand for coal has flagged in recent months due to an oversupply of the fuel in Asia.
Mr Masaaki Bito general manager of Sojitz told Reuters that while the bearish coal market is a concern, demand from China for Mongolian coal is expected to pick up and may more than double in three years.
Sojitz is aiming to boost its Mongolian coal sales to China to 3 million to 5 million tonnes a year within three years. It now sells 1 million tonnes through Zhongmeng, which has coal stockyards, trucks, washing plants at the border area between China and Mongolia and a key cross-border export license.
Sojitz, which is seeking a stake in Mongolia’s massive Tavan Tolgoi coal deposit as part of a Japanese and South Korean consortium, expects China’s demand for Mongolian coal to grow to 30 million to 50 million tonnes in three years, up from 20 million last year.
Apart from Mongolian coal, Sojitz also sells 8 million tonnes a year of Australian coal, 7 million tonnes of Indonesian coal and 3 million tonnes of Russian coal to Japan and other Asian countries, Bito said.
Mr Bito shrugged off concerns about a possible move by Indonesia, the world’s biggest thermal coal exporter, to curb coal exports and tax shipments of the mineral. Indonesia has so far steered clear of taxing coal exports.
Mr Bito said he expected coal to be eventually exempted from the export restriction and the tax plans. Sojitz has an equity stake of 2.5 million tonnes of coal in Indonesia.