Increasing Interest in Coal-Liquid Project

Thursday, June 05, 2008.
Foreign and local companies this week presented the government with their feasibility study on coal to liquid technology.
‘Headwater’, the US company that proposed and introduced the Direct Coal Liquefaction technology in March, along with Mongolian company ‘ICM’ and Germany company “Uhde”, introduced their feasibility study on Tuesday (June 3).


S.Otgonbat, advisor from the Ministry of Trade and Industry, said the Mongolian government is studying the proposals from five local and foreign companies on coal –to liquid technology.
Those companies promised that they would handle any future crisis once the complex industries have been built, in exchange for government support on clear legal and tax environments.


The coal to liquid fuel project requires a large investment to build the complex industry, which consists of a power plant, coal washing plant, coal cocking and another second product producing industries.
The complex industry will cost about US$1 to $2.5 billion. The complex industry will take four to five years to construct.
Mongolia has about 160 billion ton in coal reserves and is listed as the 12th largest country of coal reserves globally. Accessing this, however, would depend on 100 percent of petroleum product from Russia.


The main goal of the coal liquefied fuel project is to supply at least 30-40 percent of local petroleum need. Mongolia would buy diesel fuel from Russia after the complex industries was built.
And the price of the liquid fuel would possibly be 50 percent cheaper than importing petroleum product.
D.Nemekhbayar, Executive Director of the ICM company, said that ICM company has worked with German company in order to develop the project over the last three years.
The company determined there were 210 million tons of coal in the Tov aimag deposit reserve, and another 300 million tons of coal reserve possibly yet to be determined. On this figures, the industry would exist for 30 years.


The industry will produce enough production to support Mongolian demand and would possibly allow exports to China.
Mongolian demand of petroleum product is 700 thousand ton per year.
Headwater has proposed that it will produce three million tons of liquid fuel per year and ICM promised one million tons per year.


The company request from the government a unique proposal, and is apparently very detailed and with clear legal documents.
The coal to liquid project has garnered the interested of companies from the US, France and Germany. The Mongolian government said it would give more attention to the project in order to reduce its dependent position of petroleum.

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