The trading company struck an agreement with Inner Mongolia Zhongmeng Coal, a wholly owned subsidiary of China’s Inner Mongolia Erdos Group, to purchase the stake for 30 million Renminbi, about 375 million yen or $US4.6 million.
Sojitz expects the export volume of metallurgical coal from Mongolia will steadily increase to supply 10% of the world total trade volume by taking advantage of its geographical adjacency to Japan, China and South Korea.
While the company had been active in the sale of Mongolian coal to China via Zhongmeng Coal since 2010, the company said it now intended to expand its coal sales in China market and develop further markets, leveraged by Zhongmeng Coal’s border-crossing logistics and trade facilities.
Zhongmeng Coal possesses its own border-crossing logistics and trade facilities, including a coal stockyard, coal transportation vehicles and a coal washing plant at the border area between China and Mongolia.
In addition, the Erdos Group handles ferroalloy, electric power, coal and coal chemicals, primarily in Inner Mongolia and is one of the region’s largest companies.
Sojitz also plans to develop Mongolian coal resources in partnership with Zhongmeng Coal and Erdos with the aim of establishing an original Mongolian coal supply chain covering upstream (resources), midstream (logistics and processing) and downstream (marketing and sales).
In a statement, the company noted Mongolia had abundant coal reserves of more than 150 billion tons and could produce cost-competitive coking coal by large-scale open cut mining.
“In 2011, Mongolia’s total coal export volume was approximately 23 million tons,” it said.
“The export volume from Mongolia is expected to double and reach over 50 million tons per year by 2020 in conjunction with future infrastructure development, especially railways.”
Apart from Mongolian coal, Sojitz also sold 8Mt a year of Australian coal, 7Mt of Indonesian coal and 3Mt of Russian coal to Japan and other Asian countries, Sojitz general manager Masaaki Bito told Reuters.
The news agency said Bito shrugged off concerns about a possible move by Indonesia, the world's biggest thermal coal exporter, to curb coal exports and tax shipments of the mineral.
Indonesia has so far steered clear of taxing coal exports.
Bito said he expected coal to be eventually exempted from the export restriction and the tax plans.
Sojitz had an equity stake of 2.5Mt of coal in Indonesia, the agency added.
