By Prof.P.Ochirbat
Cooperation between Mongolia and Japan in the field of mineral exploration began in the first democratic revolutionary years of Mongolia back in the 1990s, and it is my contention that this should be strengthened in the coming years and cover another revolution – that of shale gas exploitation.
I give below the more important landmarks in the bilateral cooperation, mentioned chronologically.
In 1992, Japanese experts formulated the master plan for development of the Mongolian coal industry until 2010. Expansion of the Baganuur and Shivee-Ovoo mines was taken up according to this plan and with easy term loans from the World Bank and the Japanese Government.
Besides funds,Japan supplied equipment such as 31 self-unloading trucks of 40-90 tons capacity, a 6-9 m3 capacity loader, chained and wheel bulldozers of 310-550 hp, electrical mining equipment and maintenance machinery. With its technology thus upgraded, Baganuur has been able to mine 2 tons of coal annually and has played an important role in meeting the coal needs of the economic region.
The Japanese also funded a comprehensive project to improve the capacity of the Shivee-Ovoo mine. A laboratory to test coal grades was set up,and heavy-load Komatsu cars, bulldozers and a loader with an 8m3 capacity bucket were used for soil removal and coal transport. The Shivee-Ovoo deposit has also played a crucial role in supplying the major power plants with coal.
Komatsu and Terex mining machines and parts were also supplied to the Sharyn Gol deposit with non-project funds from Japan.
Japanese cooperation has gone beyond the central economic region, to cover local coal deposits also. For instance, mining equipment and technology worth nearly JPY450 million went todeposits including Bayanteeg in Uvurkhangai, Nuurst valley in Bayan-Ulgii, Khar Tarvagatai in Uvs, Mogoin Gol in Khuvsgul, Tal Bulag in Sukhbaatar and some deposits in Gobi-Altai aimag.
Studies were undertaken on future cooperation in coal and oil shale processing to make gasified fuel and shale gas. One of these, covering oil shale grade and shale gas at Khuut and Eedemt deposits in Dundgovi,found that shale pitch ingredient in the oil shale of this area was 20 per cent. Japan was interested in collaboration but Mongolia did not pursue the matter as the benefits of using oil shale as fuel source were generally unknown at that time.
Things have changed since then. Large countries such as the U.S.A and China have made shale gas and shale oil production a strategic priority and are carrying on wide-ranging research in the area. Indeed, the U.S.A hopes to see oil shale gas accounting for 49 per cent of its total gas production by 2035 while China plans to domestically produce within 20 years from oil shale all the gas it imports today.
As for Mongolia, which imports all its gas and liquid fuel, it is strategically imperative to prioritise gasification and liquefaction of fuel from coal and shale. Japan is an especially good choice for collaboration here as they already have done technological studies of several oil shale deposits of Mongolia. I am sure a wide range of opportunities is available for such collaboration, in both government and private sectors.
To come back to coal, Japan is clearly the second gest market after China for Mongolian coking coal, and we should seek Japanese help on operating Tavan Tolgoi. Choosing Japan for a strategic partnership has economic benefits and will help ensure energy security. The partnership can be extended to several areas of the project such as construction of power plants, power lines, distribution facility, roads, railway, waterways and ports inside and outside the deposit and coal processing plants. It is worth remembering that in 1999, a joint team of Japanese and Mongolian experts made pre-feasibility studies on the Tavan Tolgoi coking coal mine and also conducted studies on the coal grade at the Shivee-Ovoo mine.
A long time ago, I expressed Mongolia’s interest in cooperation with Japan on Tavan Tolgoi to T.Kaifu, then Prime Minister of Japan. The Japanese Government and businesses have offered collaboration several times since then. At the “Cooperation between Mongolia and Japan in the coal sector” seminar 2010, Hidoshi Miyachi, Director of the Coal Department at the Agency of Energy of Japan, gave an interesting speech entitled “Japan’s role in world coal production and consumption: Significance of the Tavan Tolgoi project”.Yoshihiko Ogura from ITOCHU Corporation spoke on“Japan’s involvement in coal production of ocean region countries and what Japan expects from Mongolian coal projects”while Takahiro Kuchiki, representative of Japan Bank for International Cooperation (JBIC), titled his talk“Supporting Mongolian coal projects with funds”.
Participants in this seminar, including METI, JBIC, NEDO and some private companies have signed an agreement to support cooperation between Japan and Mongolia in developing the coal sector. It says, “The cooperation will be mutually beneficial. Mongolia will provide long term coal supply to Japan with financial support from JBIC and Japanese companies, and Japan will make efforts to accelerate the economic growth and coal sector development of Mongolia. Our further goal is to cooperate in Tavan Tolgoi project with JBIC’s financial support and Japanese companies’ investment.”
It is clear that Japan wants to cooperate with Mongolia in the field of coal. It is my desire that we reciprocate in a meaningful way.