December 15, 2017 / 8:06 AM / 3 months ago

Mongolia suspends coal customs clearance at border checkpoint to end dangerous traffic jam

ULAANBAATAR, Dec 15 (Reuters) - Mongolia’s customs has suspended the clearance of coal deliveries at a key border checkpoint into China for miners in the Gobi desert as it works to clear the road of a dangerous traffic jam.

“It should last until the long queue at the border crossing clears, approximately seven-to-10 days,” said a ministry spokesperson about the suspension on Friday.

Coal exports have helped lift the sagging Mongolian economy while foreign investment remains cool.

Mongolia, landlocked between Russia and China, agreed to a $5.5 billion bailout from the International Monetary Fund to relieve debt pressures and stabilise the national currency, the tugrik.

However, less coal is reaching the Chinese market now than the first half of the year, while the Gashuunsukhait-Gants Mod border checkpoint into China is jammed up as customs officials crack down on smuggling.

During the suspension, coal miners will not load new trucks with coal for deliveries, the spokesperson said. He added that operations would resume immediately after the road clears.

Companies will also be held to a quota for deliveries.

Hong Kong-listed Mongolian Mining Corp is currently allowed 40 percent of the traffic carrying coal to the border, according to a company spokesperson.

The traffic queues of heavy-duty trucks carrying tonnes of coal stretched as far a 130 kilometres in October.

Traffic accidents are frequent on the narrow road crowded with trucks. Drivers essentially live out of their vehicles in winter temperatures that can dip below minus 40 degrees Celsius.

The troubles at the border, which began last July, have already slowed growth.

Data from the National Statistics Office shows coal exports grew only 1.7 times to $2.1 billion in the first 11 months of the year compared with more than fourfold growth for the first half of the year.

Coal made up nearly half of the total $4.51 billion earned from mineral exports during January-November this year.

Coal miners say a railway would deliver coal more quickly and efficiently, but the government has struggled to finish a train line between coal country in the Gobi desert and the border.

More than 200 kilometres of foundations have already been laid, but the project remains unfinished since financing dried up. (Reporting by Terrance Edwards)

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