Between A Rock And Hard Place: Mongolia Exploits Coal At Climate’s Cost – Analysis

By Subel Rai Bhandari

Barkhas Buyandavaa would rather be working anywhere else.

Shirtless and covered in black dust, he is trying to fix his 42-wheeler truck by the roadside in the middle of the southern Govi steppe in eastern Mongolia.

“I know coal is bad, but I have no choice. This is the only way to earn a decent living,” said the independent trucker, who transports coking coal on contract for a mining company. 

If he were working elsewhere, he would earn three to four times less than he does now.

“I am only working to save some money to go abroad, and then I will quit,” the 32-year-old said. “Most likely Europe.

Since 1990, Mongolia has transformed from a Soviet Union-style communist state into a vibrant democracy, tripling its GDP per capita and reducing poverty by more than half, largely thanks to agriculture, livestock and mineral resources.

While the world is cutting down on coal – the most polluting fossil fuel and single largest source of global carbon emissions – Mongolia is ramping up production.

Mongolia produced 32.3 million metric tonnes in 2021. Last year, it increased by 22%, catching up with its pre-COVID-19 levels, the World Bank said in April.

Coal provides more than 90% of land-locked Mongolia’s electricity demand, among the highest proportions in the world, according to energy research organization Ember. It also accounts for 30% of its exports.

Government officials have been vocal about their need to use “this window of opportunity … to be able to export as much coal as we can,” then-Deputy Mining Minister Batnairamdal Otgonshar said last year.

Even the country’s environment minister says the country needs coal for the next five to 10 years.

“As you know, due to the Ukraine-Russia war, the natural gas prices have increased … and even countries like Germany have gone back to the use of coal,” Bat-ulzii Bat-Erdene told Radio Free Asia (RFA).

“Mongolia is completely dependent on coal for income and heating solutions in the winter. Fully phasing out coal is almost impossible in the near future.”

‘Mine-Golia’

Mongolia shares a 4,700 kilometer-long (nearly 3,000-mile) border with China, which is the global leader in renewable energy but burns more coal than the rest of the world combined. It consumed an all-time-high 4.5 billion metric tonnes of coal in 2022, and is set to burn more in 2023.

Customs data show that Mongolia’s coal exports jumped 135% to $6.5 billion in 2022 and 94% of that went to China.

Chinese leader Xi Jinping made clear in July that China would reduce emissions at its own pace and would not be influenced by external factors. It aims for emissions to peak in 2023 before slowing down to reach net zero by 2060.

In the meantime, Mongolia – dubbed “Mine-Golia” – is primed to meet a growing demand. The vast country has proven coal reserves of 33.27 billion metric tons – equivalent to about one-thousandth of annual production.

Some 5% of its landmass is covered by more than 2,700 valid mining licenses. It is one of the few countries in the world which still has large coal power projects in the pipeline.

According to various government and private business estimates, its exports could reach 70 million metric tons annually by 2025. 

Mongolia plans to establish more round-the-clock border checkpoints and transportation links to China to facilitate more exports. It recently opened a 233-kilometer (145-mile) direct rail line from the Tavan Tolgoi mine to the Gashuun Sukhait border crossing to China’s Inner Mongolia region.

View from the open pit

Tens of thousands work at open pit mines in Tavan Tolgoi in southern Mongolia, one of the world’s largest coking and thermal coal deposits, with 7.5 billion metric tons of reserves.

Davaadorj Sandagdorj, a supervisor at a provincial government-owned mine there, said it provides critical employment for locals. 

“We are not doing it out of choice but due to lack of it. Coal mining has helped us improve our situation,” said Davaadorj, whose parents were miners.

Despite being worried about the environment, “there aren’t many options available for us,” the 45-year-old said atop an open pit, where about 300 miners work.

Last year, a huge anti-corruption demonstration in the capital Ulaanbaatar forced the government to act against a state-owned coal company that operates in Tavan Tolgoi. High-ranking officials were allegedly implicated in illegal coal smuggling to China.

The opposition Hun party estimated the potential revenue loss to be around 40 trillion Mongolian tugriks (US$13 billion).

Experts say mining is one of the main reasons for water, soil and air pollution and degradation in Mongolia, directly impacting herders and their livelihood in the steppe, a semi-arid grassland. 

A case study from two mining sites published in April found higher rates of soil erosion in the vicinity of the mines and adjoining industrial areas. 

Hard life on the road

Barkhas, the contract driver, mostly drives on unpaved desert roads, rutted from the tires of heavy trucks that can carry up to 100 tons of coal at a time. He drives for weeks at a time. The heavy loads and road conditions mean his top speed is only 60 kilometers per hour (35 mph).

“This is a hard life. The worst thing is for the truck to break down in the middle of the desert,” he said, adding he is worried about losing his job.

“If coal exports stop, tens of thousands of people will lose their livelihood,” he said. “There isn’t enough work in the city, especially for the kind of money we earn.”

Another truck driver ferrying coal from Tavan Tolgoi to the border said he would choose work that was less damaging to the environment, if he had a choice.

“At this point, most youths have only two options: mining or going to South Korea to do manual labor,” he said. “We are of course worried about the environmental mess. This is a beautiful land, but it’s ugly now.”

However, the main threat to his country is actually from China, the 57-year-old said, speaking on condition of anonymity due to his transport company’s policy against speaking to the media.

“China is too powerful, he said. “They want to buy everything as cheap as possible.” 

He acknowledged that there is little Mongolia can do about that.

“They are playing with us, and our salaries are dependent on China.”