MEC plays a vital role in China-Mongolia energy collaboration

Hong Kong-listed Mongolia Energy Corporation, or MEC, and its subsidiaries have strengthened China-Mongolia cooperation in energy and infrastructure through sustained investment in the Khushuut coal mine project, contributing to regional connectivity, industrial energy supply and local development.

As cooperation in economic, infrastructure and energy sectors under the Shanghai Cooperation Organisation framework expands, collaboration between China and Mongolia is playing an increasingly important role in promoting regional connectivity and mutual benefit.

MEC has been active in the China-Mongolia western region for nearly two decades. Leveraging its integrated coking coal supply value chain, the company has become a benchmark for bilateral energy cooperation, supporting energy demand in China and advancing local development in Mongolia.

The company focuses on mining the Khushuut coal deposit in Mongolia's Khovd province, dry processing coal at the mine, and transporting it across the border. Coal from the mine is hauled along a 311-kilometer asphalt-paved road constructed and maintained by MEC to the Takixken road port in the Xinjiang Uygur autonomous region. From there, it cycles through a coal processing plant in Xinjiang's Qinghe county before being supplied to major steel and coking enterprises in western China. MEC holds 100 percent of the mining license to the Khushuut deposit, which contains 167 million metric tons of coking coal with an annual production capacity of up to 8 million tons.

Over the years, MEC has invested more than 4.3 billion yuan ($601 million) in mining and transportation infrastructure, supporting both project development and cross-border connectivity. Between 2008 and 2012, the company invested 1.5 billion yuan to build a two-lane asphalt road linking Khushuut to Takixken, in addition to a coal export-dedicated lane at the Bulgan border in Mongolia. This major transport corridor, available free of charge to local residents, has significantly improved mobility and economic exchanges in both regions. In 2013, MEC invested 300 million yuan to construct a coal processing plant and a customs bonded yard, which have enhanced processing, storage capacity and import customs clearance efficiencies at the Takixken industrial park. In 2023, MEC spearheaded a border expansion project at Bulgan, upgrading the crossing from a single-lane system to a dual-lane one, which greatly improved efficiency and throughput.

These developments have positioned the Khushuut project as an important hub on the western route of the China-Mongolia-Russia Economic Corridor, strengthening industry supply chains, reducing logistics costs, and supporting regional integration.

MEC's operations have also contributed significant benefits in Khovd province. The company directly employs around 2,700 people at the Khushuut coal mine, 88 percent of whom are local residents. Between 2007 and 2024, MEC paid 1.4 billion yuan in taxes to Mongolia's national and local governments, earning recognition as a "Best Taxpayer Enterprise" and a place among Mongolia's "Top 100 Enterprises" for eight consecutive years.

Beyond economic contributions, MEC has undertaken social responsibility initiatives. During 2018-19, it invested more than 21 million yuan to relocate 215 households in Khovd province, establishing a modern village center with improved social and educational facilities. At the same time, the company created a logistics industry in the area by cooperating with 26 local transport enterprises which operate more than 1,200 heavy trucks for coal haulage.

Since 2014, MEC has signed three cooperation agreements with the Khovd provincial government and donated 140 million yuan to the Khovd-Khushuut Development Fund, including more than 50 million yuan since 2021. These funds have supported healthcare, education, social welfare and infrastructure projects. The company has also provided scholarships and financial assistance to more than 300 students in Mongolia. In order to support local businesses, the company prioritizes procurement from local small and medium-sized enterprises, and has partnered with more than 300 businesses.

MEC noted that while Mongolia's business environment has improved in recent years through government reforms and policy adjustments, further progress in regulatory efficiency and infrastructure capacity would support stronger cooperation.

Looking ahead, the company still faces investment challenges, such as tax policies and border capacities. However, the company has pledged to continue strengthening cooperation with the governments of China and Mongolia, as well as with local communities. By leveraging its integrated operational model and advanced processing technologies, MEC aims to enhance cross-border energy cooperation, safeguard supply chain stability, and contribute to the sustainable economic development of both countries.