Ministry of Mineral Resources and Energy, Fuel Policy Department Director A.Erdenepurev Ulaanbaatar city 2012 ELECTRIC POWER GENERATION COAL PRICE: CHALLENGESAND POSSIBLE SOLUTIONS
COAL CONSUMPTION: • COAL FOR ELECTRIC POWER GENERATION PURPOSE • REST: • EXPORT • LOCAL/RURAL CONSUMPTION • OTHERS
LEGAL ENVIRONMENT “Coal pricing guideline” approved by the Infrastructure Minister in 2002 • Old Statement of the Energy Law • “New amendment in the Energy Law which was approved on 2011-12-09 • The Statement of 6.1.7 “to approve pricing guideline of fuel which is used for power generation and to check the fuel pricing calculation” • In the Government central organization prerogative • “The Statement 9.1.14 “to approve pricing guideline of fuel which is used for power generation and to check the fuel pricing calculation” • In the Regulatory Committee authorizations
COAL PRICE VS COST: COMPARISION Average 3000 MNT* 5 mln tons= 15 blntugrig loss
PROBLEMS OF COAL MINES • Poor financial situation due to accumulated loss. • Delayed payment of Loanand interests • Cost increase such as currency exchange, diesel fuel etc. • Mining conditions are getting more complex from year to year. • Obsolete machinery and equipments. • .... • ....
POSSIBLE SOLUTIONS • Renew the Coal Pricing Guideline, do detailed calculations, • Indexation based on cost components, • Coal Pricing based on free market principles