Mongolia copper concentrate exports to China drop about 70% amid border restrictions

The export cuts amount to a decline of about $300 million compared to normal operations and could reach $1.2 billion if restrictions continue through the end of the year, according to local media reports. Oyu Tolgoi did not confirm those loss figures in a statement to The Associated Press.

Mongolia is a major supplier of coal and copper to China, the world’s largest consumer of both commodities. China’s Ganqimaodu Border Port is adjacent to Mongolia’s Gashuunsukhait Border Port.

Mongolian border officials said the slowdown is related to infrastructure and technology upgrades at the Chinese port. In August, Chinese authorities introduced an in-vehicle facial recognition system for truck drivers, and installation and maintenance work have affected processing capacity. The Mongolian government said the Chinese embassy in Ulaanbaatar informed it that the work may continue until the end of December; Mongolian news reports said it was originally due to end by late September.

Road and Transport Minister Delgersaikhan Borkhuu said all transport routes on the Mongolian side remain open and the government was not aware of any political reasons behind the restrictions.

Finance Minister Mendsaikhan Zagdjav said some ministers were instructed during a cabinet meeting to visit the border crossing and meet with Chinese authorities, according to local news reports.

The restrictions have also affected coal exports through Gashuunsukhait, with vehicle crossings falling from 1,300 to just over 1,000 a day, border authorities said.

Mongolia’s economy relies heavily on mining, which accounts for roughly a quarter of GDP. Last year, coal and copper concentrates made up 82.3% of merchandise exports, with 89.4% of total exports going to China. Mongolia is particularly sensitive to disruptions to cross-border trade and fluctuations in commodity prices.