AsianFin -- Mongolia is set to boost its coal exports to China by nearly 20% this year, as the central Asian nation looks to deepen energy collaboration with its resource-dependent neighbor.

In an interview on Monday, Mongolian Prime Minister Oyun-Erdene Luvsannamsrai revealed that the country aims to increase coal exports to 100 million tons by 2025. This goal follows a recent agreement between the two nations to establish a new cross-border rail link, which is expected to add 30 million tons of annual transport capacity.

The new rail connection is part of a broader strategy to enhance Mongolia’s coal export capacity to China, with plans to eventually reach 165 million tons—nearly double the 84 million tons exported last year. Oyun-Erdene also emphasized Mongolia’s ambition to collaborate with China and other countries across various energy sectors, including renewable power generation, hydrogen production, and natural gas transit.

“Mongolia possesses vast land capable of producing energy,” Oyun-Erdene stated. “We can sell this energy not only to China but also to other major Asian economies.”

China, the world’s largest coal importer, saw record-breaking coal imports in 2023, driven by significant increases from Australia and Mongolia. Notably, Mongolia supplied 60% of China’s coking coal imports, a critical component for steel production.

The expansion of rail infrastructure and energy partnerships underscores Mongolia’s growing role as a key energy supplier in the region, while also highlighting China’s ongoing reliance on coal to meet its industrial and power generation needs.