Trafigura Beheer BV plans to expand in Mongolia to deliver more iron ore, coal and copper to the China market.
Mr Mikhail Zeldovich head of Trafigura’s Russia and Mongolia unit said that it secured its first iron ore and coal supply agreements in the country in the past few months. Talks on more accords are in progress and Trafigura’s first Mongolian tin shipment is due this week.
Mr Zeldovich said that “In all commodity businesses I anticipate strong growth and in the bulk commodities of coal and iron ore I am targeting a multiple of what we already have. We very much see Mongolia as a sleeping giant of resources that’s now beginning to awaken.”
According to Ulan Bator based Trade and Development Bank, Mongolia in June surpassed Australia as the biggest seller of coking coal to China and total exports are due to rise by 65% this year. Rio Tinto Group will begin commercial output from the Oyu Tolgoi mine in 2013 a deposit in central Mongolia that it says is one of the biggest untapped sources of copper and gold.
A mining boom in the world’s most sparsely populated nation promises the greatest influx of wealth for Mongolia since Genghis Khan conquered most of Europe and Asia in the 13th century. Economic growth may surge to 23% in 2013 more than twice the forecast expansion in China, as mining projects begin production, the International Monetary Fund said in April.
Mr Zeldovich said that last year, Amsterdam based Trafigura provided more than USD 40 million in financing to help start production at a lead and zinc mine in eastern Mongolia in exchange for an off take accord. The trader has also invested in a trucking company in Mongolia to transport coal from producers including Mongolyn Alt Group to China. It ranks among the top three sells of copper in Mongolia.
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