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Introduction:

Thanks to its abundant coal reserves, cheaper coal price and favourable strategic location, Mongolia is one of the more promising coal producers and exporters in the world. In the past five years, the volume of coal exported by Mongolia increased by more than three times. Currently, almost all Mongolian exported coal is delivered to China. Consequently, the export price and demand for Mongolian coal is greatly determined by the Chinese coal market.  In the present report we investigate how drivers, including the power sector and steel sector in China, are likely to influence demand for Mongolian Coal.