Ministry of Mining Mongolia Mongolia Master Plan Study for Coal Development and Utilization November 2013 Japan International Cooperation Agency (JICA) Japan Coal Energy Center IL JR 13-164 Table of contents Chapter 1 Introduction .................................................................................................................................... 1 1.1 Background of the study ....................................................................................................................... 1 1.1.1 Outline of Mongolia ....................................................................................................................... 1 1.1.2 Present condition of industry and economic growth of Mongolia ................................................. 2 1.2 Purpose of study .................................................................................................................................... 4 1.3 Flow of study ........................................................................................................................................ 4 1.4 Study system ......................................................................................................................................... 4 1.4.1 Counterpart mechanism ................................................................................................................. 4 1.4.2 Old and New Government organizations ....................................................................................... 6 1.4.3 Structure and allotment of study group .......................................................................................... 7 1.5 Study schedule ...................................................................................................................................... 9 Chapter 2 Coal Supply-Demand Forecasts for Major Supplier Countries and Northeast Asia, Etc. ............. 10 2.1 Analysis of present global energy supply-demand situation ............................................................... 10 2.1.1 Global energy supply and demand ............................................................................................... 10 2.1.2 Energy Supply and Demand in Asia ............................................................................................ 12 2.2 Future trend analysis of world coal supply-demand and price ............................................................ 16 2.2.1 World coal reserves ...................................................................................................................... 16 2.2.2 Present situation of coal supply and demand ............................................................................... 16 2.2.3 Coal Supply and Demand Outlook .............................................................................................. 32 2.2.4 Present state of and outlook for coal price ................................................................................... 42 2.3 Outlook for coal supply and demand such as in Northeast Asia and analysis of future Northeast Asia coal market ................................................................................................................................................ 45 2.3.1 Coal demand ................................................................................................................................ 45 2.3.2 Coal supply .................................................................................................................................. 55 2.4 Mongolia Coal Supply and Demand Figures and Projections for Export Potential ............................ 69 2.4.1 Coal Supply and Demand Figures ............................................................................................... 69 2.4.2 Projections for Export Potential ................................................................................................... 70 Chapter 3 Coal Development Analysis and Development Projects .............................................................. 76 3.1 Review of laws and policies of Mongolia relevant to coal ................................................................. 76 3.1.1 New Minerals Law ....................................................................................................................... 76 3.1.2 Basic Concepts of Rural Development ........................................................................................ 80 3.1.3 Policies of Mining Development ................................................................................................. 80 3.1.4 Investment Policy......................................................................................................................... 82 3.1.5 Coal Program ............................................................................................................................... 83 3.1.6 National Guidelines on "Coal Field Development" ..................................................................... 84 3.1.7 Contents of big projects conducted on a priority basis which was announced by Mongolian government. .......................................................................................................................................... 84 3.1.8 Taxes Associated with the Production and Sales of Coal ............................................................. 84 i 3.2 The Situation of the Existing Coal Mine and New Coal Mine Plan .................................................... 87 3.2.1 Summary ...................................................................................................................................... 87 3.2.2 South Gobi ................................................................................................................................... 94 3.2.3 East Gobi .................................................................................................................................... 102 3.2.4 Ulaanbaatar Peripheral ............................................................................................................... 103 3.2.5 North .......................................................................................................................................... 106 3.2.6 West ............................................................................................................................................ 109 3.2.7 East............................................................................................................................................. 113 3.2.8 South .......................................................................................................................................... 114 3.2.9 Mine Production Planning Issues and Recommendations ......................................................... 116 3.3 Economic Infrastructure Development Plan ..................................................................................... 123 3.3.1 Summary of Survey Plan of Economic Infrastructure plan ....................................................... 123 3.3.2 Current State and Issues of Domestic Infrastructure .................................................................. 125 3.3.3 The Case Study concerning Coal Export ................................................................................... 142 3.3.4 Results of the Container Transport Survey ................................................................................ 155 3.3.5 Other Coal Transportation .......................................................................................................... 156 3.3.6 The Subject and Proposal about an Economic Infrastructure .................................................... 157 3.4 New Technologies of Coal Development .......................................................................................... 158 3.4.1 CBM........................................................................................................................................... 158 3.4.2 Underground Gasification .......................................................................................................... 158 Chapter 4 Potential of Coal Utilization Technology.................................................................................... 159 4.1 Current status of coal utilization in Mongolia and improvement possibility consideration .............. 159 4.1.1 Coal-fired power plant ............................................................................................................... 159 4.1.2 HOBs and industrial boilers ....................................................................................................... 192 4.1.3 Civilian/Public Businesses/Transport Sector ............................................................................. 198 4.1.4 State of house coke production .................................................................................................. 205 4.1.5 Analysis of current coal preparation technology and evaluation of improvement potential ...... 214 4.2 Installation of future coal utilization techniques in Mongolia ........................................................... 221 4.2.1 Outline of global coal use .......................................................................................................... 221 4.2.2 View of coal utilization techniques installing ............................................................................ 225 4.2.3 Potential