Presentation on theme: "Mongolian Coal Resources Complement to China’s Inner Mongolia &"— Presentation transcript:
1Mongolian Coal Resources Complement to China’s Inner Mongolia & Coaltrans China BeijingMongolian Coal Resources Complement to China’s Inner Mongolia &Rise of Inner Mongolia Energy BaseYijun ChangChairman, Shanxi Fenwei Energy Consulting Co., Ltd.April
2Agenda 1. Coal Resources in Mongolia 2. Coal Resources in China’s Inner Mongolia3. Mongolian Coal Resources Complement to China’s IMAR & Their Comparison4. Interdependent Development of Mongolia and IMAR， and Rise of IMAR Energy Base5. IMAR will Replace Shanxi to Become the Largest Energy Base in China
3Coaltrans China Beijing 1. Coal Resources in Mongolia
4A. Coal-Forming Ages and Characteristics in Mongolia Sketch of Tectonic Structure in Mongolia and ChinaCoal formation in Mongolia was controlled by Siberia Plate. In Carboniferous Age, Mongolia was still in marine environment when coal was depositing in North China.At the beginning of Permian, Altai Mountain began to uplift and marine environment subsided from west to east.Later, good coal-forming environment was formed from west to east with coal bearing strata of Permian, Jurassic, Craterous and Paleogene in turn geographically.During Alpine Tectonic Movement (namely Himalayan Movement), Altai fold uplifted which made coal seams buried shallowly, thick, and stably distributed that are suitable for opencast mining.
5A. Coal-Forming Ages and Characteristics in Mongolia 1. Resources up to 152 billion tonnes, ranking top 15 globally.2. Main coal formation ages: Carboniferous-Permian, Jurassic, Craterous and Tertiary.3. Thick coal seams formed in all ages, but lots of partings and sub-seams. That reflected a relative stable inland coal-forming environment.4. Generally shallow buried and good mining conditions; It is one of resourceful areas that are most suitable for surface mining.Coal-bearing Strata in Mongolia
6B. Coal Type, Quality and Characteristics in Mongolia Mongolian coal type is primarily influenced by plutonic metamorphism. Degree of metamorphism depends on coal-forming ages. With regular distribution of coal-forming ages, coal types are also distributed regularly: coking coal in west and central south parts, steam coal in central part, and lignite in eastern part. Due to pile-up effect of dynamic metamorphism of Altai fold belt, the metamorphism of coal measure in same age is rising from east to west. For instance, Carboniferous coking coal is JM and 1/3JM in central south part but JM, SM, and PM in western part.Most coal is of low ash, low sulfur, and low phosphors. Most coking coal is easy to be washed and has great potential for future use. It is significant to complement and improve coking coal in Inner Mongolia and Xinjiang.Distribution of Coal Type in Mongolia1. Rich coking coal resources, accounting ~35% of total coal resources in Mongolia. One of areas with most abundant coking coal reserves and full coking coal types2. Metamorphic degree becomes higher southwestwardly in same geological age3. Better washibility than IMAR’s coal. Most coal seams are featured by good washbility, low sulfur and low phosphor.Degree of Metamorphism Increasing
7Coaltrans China Beijing 2. Coal Resource in China’s IMAR
8A. Coal-Forming Ages and Characteristics in IMAR 1. Accumulative proven coal reserves reach billion tonnes, ranking first in China.2. Similar coal forming ages with Mongolia3. Few Carboniferous-Permian coal resources, large quantity of Jurassic and Craterous resources.4.. Similar coal-forming environment with Mongolia but thinner coal seams.IMAR is located at the boundary of Siberia and North China Plates. Marin environment lasted rather long in most IMAR. It uplifted to land in Triassic and marine environment gradually subsides eastwardly. Therefore, Faulted Basin Groups were formed in Tianshan-Yinshan structure zone and middle, north and east parts where Craterous and Triassic lignite dominated.Southern IMAR is located at plateau section in north of North China Plate. Carboniferous-Permian is at the edge of North China Coal-Bearing Region. During Jurassic, Ordos Basin was formed. Therefore, this area was reserved with few Carboniferous-Permian coal and rich Jurassic steam coal.
9B. Coal Type, Quality and Characteristics in IMAR 1. IMAR is rich in coal resources but most of them are steam coal. Rich lignite is beneficial for coal gasification, liquefaction and development of related industrial chain. However, the shortage of coking coal resources will influence the comprehensive competitiveness of IMAR’s coal resources.2. Coking coal is the superimposed result of two factors: plutonic metamorphism and local structure. The typical characteristic is the metamorphism degree becomes lower as coal ages become newer. In Wuhai, the ground stress of Helanshan Fault Zone transformed to heat energy which caused high temperature and high pressure locally, and caused the metamorphism degree rising in surrounding areas and formed JM and even anthracite.3. Most coal in IMAR is difficult to be washed and its content of sulfur and phosphor are higher than that of Mongolian coal.
10Coaltrans China Beijing 3. Mongolian Coal Resources Complement to IMAR and Comparison
11A. Resources and Coal Types of Mongolia and IMAR IMAR’s proven coal reserves rank first in China. From the map below, we can see that Mongolian coal resource is bigger than IMAR’s. Mongolia and IMAR is one of the areas that are most abundant with coal resources in the world. Meanwhile, we can find that rich coking coal resources in Mongolia greatly complement to IMAR’s coal resource, which guarantee the strategic development and competitiveness of IMAR’s coking industry. It lays good foundation for IMAR and Mongolia to become the coking coal supply for China and even in the world.What degree is that Mongolian premium coking coal to improve the using value of IMAR’s coal?Let’s see following comparison of coal quality
12B. Complement of Mongolian Coal to IMAR and Comparison 1. Mongolian premium coking coal complement to IMAR and greatly ascend value of IMAR’s coal.2. Guarantee strategic development and competitiveness of coking chains in IMAR.Mongolia coking coal provide strategic support and guarantee to China and even world.Comparison of coking coal resources in Mongolia and IMAR(billion tonnes)Coal ResourcesOf which:LigniteBituminous(Steam coal)Coking coalAnthraciteMongolia1523860.853.2IMAR701.6104.2577.817.52.1Note: Mongolian coal resources refer to those has been conducted geological survey. The resources by coal type are estimated based on coal-forming ages. Just for reference. The coal resources of IMAR are proven.
13Make coke independently B. Complement of Mongolian Coal to IMAR and Comparison5. Comparison of quality of main coking coal in Mongolia and IMARAreaAsh %Volatile Matter %Sulfur %WashbilityMake coke independentlyIMARWuhaiDifficult to washGenerally hard to produce premium metallurgical coke above grade 1.Coke produced fail to satisfy modern large blast furnace.Baotou2526-480.1~0.9MongoliaCentral South11.2~20.424-380.4~0.7Mostly easy to washCan produce Grade 1 met coke or better coke or foundry coke.Coke produced can satisfy modern large blast furnace.West10.9~22.615.4~23.40.3~0.6Available product by rational blending8-1018-28<0.6
14Coaltrans China Beijing 4. Interdependent Development of Mongolia and IMAR, and Rise of IMAR Energy Base
15A. Politics and Economics China and Mongolia declared to develop good-neighbor trust partnership in 2003 and signed the Outline for Mid-Long Term Economic and Trading Cooperation between China and Mongolia in 2008.China invested USD1181 million in Mongolia in 2007, about 51.3% of total foreign investment in Mongolia and the largest investor in Mongolia.
16B. Logistics1. StatusBoth road and railway infrastructures are poor in Mongolia. Only one trunk railway and four branch lines existing currently. Annual cargo capacity of railway is about 20mt.2. PlanMongolia intends to build a rail line from Tavan Tolgoi to Ganqimaodao.China plans to build more railways in IMAR.
17Guarantee resource for IMAR Premium coking coal resources C. Interdependent Development Coal Industries in IMAR and MongoliaCHINAMONGOLIATechnologyEquipmentCoking coal demandSupport coal miningDrive coal productionWith decades of coal development, China is at or near the world level in coal mining, processing and utilization. China is competitive enough on aspects of technology, equipment, worker and organization. Plus its advantages in location, market and culture similarity, China will play an important role in Mongolian coal development. Without participation of China, Mongolian coal development and western investors are hard to obtain desired achievements.Guarantee resource for IMARPremium coking coal resourcesIMAR, as a channel for cooperation between China and Mongolia, will be the biggest beneficiary. The development of Mongolian coal industry will further improve IMAR’s coal products, industrial chain and competitiveness and greatly promote the strategic position of IMAR in Chinese energy development.Complementary resources and interactive development between Mongolia and China’s IMAR provide sufficient and necessary conditions for rise of IMAR energy base. In near future, we will see that IMAR will surpass Shanxi to become the most important energy base in China.
18Rise of IMAR Energy Base D. Adequate Conditions for Rise of IMAR Energy BaseComplement of coal resourcesEconomic and politic promotionRise of IMAR Energy BaseImprovement of logisticsInterdependent development of coal industry and industrial chainsMongolian’s resources support China’s growing coal demand
19Coaltrans China Beijing 5. IMAR to Replace Shanxi to Become Largest Energy Base in China
20Why compare IMAR with Shanxi? 1. Shanxi is China’s traditional coal producing base and exporting province.2. Precondition for rise of IMAR coal base is the shrink of Shanxi coal base.Let’s compare IMAR and Shanxi in following aspects:Coal output and future trendCoke industrial chain and development trendCoal to oil industrial chainComprehensive competiveness
21A. IMAR will Surpass Shanxi to Become Largest Coal Producer Comparison of coal productionIMARShanxiRapid and Large-scale Mine ConstructionNewly operated capacity is 30.9mt in 2009; newly built capacity is 63.5mt in Total production capacity of coal to reach 600mt in 2010.Closing Mines and Limiting Output to Rise PriceBasic policy is closing or consolidating local mines to reduce numbers. Actual coal output to be 500mt in 2010.Quickly Improved Construction RequirementsNew mine >1.2mtpa; opencast >3mtpa30% of coal has to be transferred locally for new minesNot approve projects of heavy pollution and big water consumptionHeavy Historical Problems50% coal production from local mines. Government’s consolidation measures are facing challenges in technology, law, and benefit conflicts.Active Government, Open PolicyActively encourage foreign or other provinces’ enterprises to take part in coal development. Enterprises are dominated by enterprises which is favorable for improving management level and safety conditions.Conservative Government and PolicyDiscourage foreign or other provinces’ enterprises to be involved in coal development in Shanxi. Enterprises are dominated by government. Without normal production order. Safety can’t be ensured in production.
22Projection of Coal Production (million tonnes) A. IMAR will Surpass Shanxi to Become Largest Coal ProducerCAGR of Coal Productions ( )IMAR 20.4% reach 35% in recent yearsShanxi 10.4%Projection of Coal Production (million tonnes)IMAR ,000ShanxiIMAR will surpass Shanxi on coal output this year and on coal production capacity within three to five years, and will become the largest coal producer in China.
23B. Rapid Growth of Coke Capacity to Change China’s Coke Industrial Layout Comparison of coke productions in IMAR and ShanxiIMARShanxiIncreasing Coke Plants, Swiftly Expanding Coke CapacityMost coke enterprises are in Wuhai where 7 new coke plants about 1mtpa will come on line in 2009.Coke production capacity has been increasing that will reach 20mt in 2009, up 53.8% over 2008Output Limited and Market Share Reduced by “Limiting Output to Rise Price” PolicyThe percentage of Shanxi coke production reduced from 32% in 2004 to 25% in Shanxi coking coal prices have been higher than that in surrounding areas which has affected the competitiveness and market share of Shanxi coke.Output and Quality Improvement Relies on Mongolia’s Coking CoalWith few coking coal resources and poor qualities, IMAR can rely on Mongolian abundant and premium coking coal resources to develop its coke industry and improve coke quality.Reducing coking coal supplyShanxi carries out “closing mines and limiting production to rise price” for years. Most coking coal supply is from local mines in Shanxi. However, lots of mines in such cities as Linfen have been closed in past two years or are hard to produce normally in next few years. It causes Shanxi coke enterprises hard to produce and also affects coking coal supply to other important coke base such as Hebei. Therefore, China’s coking coal import has been increasing month by month this year.
24C. IMAR to be base for energy sources alternative to oil IMAR rich in lignite resources that is about 77.6% of China’s total lignite resources.With shallow buried depth and thick coal seam, coal production cost much lower than that in other provincesReliable coal liquefaction technology and competitive in coal to oilIndustrial production of coal to oil started up: Shenhua direct coal to oil (1mtpa) has tried production successfully; Shenhua indirect coal to oil (0.18mtpa) to try production in 2010; Yitai indirect coal to oil (0.16mtpa) has tried production successfully.IMAR expected to be the first to succeed technologically and economically and become producing base of oil alternative energy
25D. Comparison of Competitiveness of Shanxi and IMAR Coal Industries ItemShanxiIMAR20082020ResourceAdvantages in coal typesReserve ranks first in ChinaBetterSameCapacityBig base, slow growthSmall base, rapid growthOutputBasic guideline is limiting output to rise priceQuick and large-scale mine constructionWorseTechnologyStrong backgroundDevelop rapidlyWaterComparatively adequateComparatively shortEnvironment HarmoniousnessLot of problemsEasy for high-level managementIndustrial ChainHigh ratio of local transferringGrow swiftly with big potentialProductExcellentHas to coordinate with MongoliaCostLow transport cost, high additional costLow production cost, accelerated improvement of transportationAdministrationOfficial responsibility-ascertained system replaces professional management which causes accidents and high costWith strong motive to develop, the government widely absorb all kinds of resources to develop its coal industryComprehensiveBy 2020, IMAR will surpass Shanxi on the comprehensive competitiveness of coal industry.SX:IMAR10 : 12 : 4
26Thank YouOrganized in 1998, Fenwei is one of the premier energy consulting companies in China with a high degree of expertise and experience in China’s coal industry. The scope of services ranges from field investigations, evaluations of coal resources, feasibility and market studies, pilot plan and commercialization of technology, environmental impact and assessment.ADD: 8/F, Shanxi World Trade Tower A,111 Changzhi Road,Taiyuan, Shanxi ProvinceTel: Fax: