Erdenes Mongol recently announced that they will be cooperating with Polaris Asset Corporation, an American company, to produce 10,000 barrels of liquid fuel through coal liquefaction.

Early estimates show that the project will require more than 1.1 billion USD in funding. Wood Group and General Electric will also be involved in the project. Erdenes Mongol forecasts that 10,000 barrels of liquid fuel produced from coal will help save the Mongolian economy an average of 269.5 million USD in fuel imports annually.

The proposed refinery is expected to produce 100 to 150 Mw of energy. It will reportedly use the Fischer-Tropsch process, which will pose little to no damage to the environment. The timeline for completion of the project is set at three and a half years. The output of the refinery will be 25 percent gasoline fuel and 75 percent diesel fuel.

The decision to implement the project was made during a meeting between Prime Minister J.Erdenebat and American Ambassador to Mongolia Jennifer Zimdahl Galt on January 18. The PM met with the Ambassador and representatives from Polaris Asset Corporation and J.P. Morgan to discuss the implementation of coal liquefaction in Mongolia and the construction of a processing factory. The CEO of Erdenes Mongol, Ts.Tumentsogt, was present for the meeting.

Ambassador Galt noted, “In the past two years, Polaris Asset Corporation has been actively looking to establish a project to produce liquid fuel from coal in Mongolia. Polaris has sought involvement from the American Embassy in Mongolia, the U.S. Department of Commerce, and the U.S. State Department, and has gained the support of the U.S. government.”

Erdenes Mongol highlighted that countries around the world source more than 30 percent of their gasoline and diesel fuel from domestic coal. They underlined the favorable conditions for producing liquid fuel from coal in Mongolia, due to its vast coal reserves.

Ts.Tumentsogt stated, “This project will make an important contribution to the sustainable development of the Mongolian economy, help alleviate fuel and energy dependence, and further strengthen national security. It will also give Mongolia the advantage of using international standards and technology to source fuel from coal.”

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