China has begun replacing Russian coal with Mongolian coal.

In 2024, Russia became the sole exporter of coal to China, whose supplies have declined. Mongolian coal producers have taken the place of Russian exporters in meeting the country's needs.

This is reported by The Moscow Times.

Last year, China imported record amounts of coal – 543 million tons, which is 14% more than in 2023. The increase in imports was primarily due to Australia and Mongolia, which contributed nearly 60% and 19% respectively.

By supply volumes (about 83 million tons each), these two countries have come close to Russia, whose exports fell to 95.1 million tons.

Despite the strategic ties between Beijing and Moscow, Russia is losing out as its coal is too expensive, and new U.S. sanctions may make exports even less attractive for Chinese buyers this year.

In the meantime, Mongolia benefits from its proximity to China and aims to solidify this with better railway connections. Unlike Australia, which ships coal from afar and can respond to rising prices in other Asian countries, the vast majority of Mongolia's clients are located in one country.

Last year, Mongolia accounted for 60% of the coking coal imports for steel production of its southern neighbor. Previous objections over national security concerns regarding the alignment of the country's railway specifications with China's have been overcome, and the government now insists on improving railway connectivity at the border, which could ultimately double the coal supply to China. The Russian coal industry, having lost Western markets and facing a decline in demand from "friendly" countries, is in crisis. According to Rosstat, half of the companies in the sector are operating at a loss.

Background. Earlier, Mind reported that the Russian-Chinese project to develop the largest coal deposit in the Transbaikal region, the Zashulanskoye deposit, has been left without funding due to China's restrictions on cross-border payments with Russia.