Source: Reuters                          Date: 21 April, 2011

Mongolia halted truck deliveries of coal from the South Gobi region to China on Tuesday, with the ban expected to last about two days, after China closed a part of the border citing a technical glitch, a lobby group for the Mongolian mining sector said. The South Gobi region is the location of the Tavan Tolgoi property, one of the world's biggest coal deposits. Mongolia has yet to build railway infrastructure in the region and exporters continue to depend on trucks.

"The Chinese side said they had some problems (at the border crossing of Zamiin Uud) with their computer software registering the vehicles," said Mr. B. Enkhbaatar, chairman of the Mongolian Mining Club. "It affected all traders in Mongolia and so the Mongolian Government is taking countermeasures."

Official Chinese news agency Xinhua said Mongolia suspended coal deliveries following a spate of accidents on a dirt road running from Tavan Tolgoi. Citing local media, it said 23 people were killed in 31 road accidents on the Tavan Tolgoi highway in 2010, with another three fatalities in the first quarter of 2011.

"The Mongolian government does close off shipments for a day or two when there has been an accident -- sometimes there is so much dust caused by the trucks and local herds or herdsmen are hit," said Mr. Jim Reichert, senior infrastructure specialist with the World Bank in Ulaanbaatar. “They need to build a railway as soon as possible to transport the coal -- there are any number of reasons to do that," he said.

Private financing was available to build railways south to China, but the Mongolian Government blocked construction in order to concentrate on a cross-country rail network that would link Tavan Tolgoi with Russia and the Pacific coast.

The Mongolian Mining Corp. and South Gobi Resources also have mining operations in the South Gobi region. Mr. David Bartel, vice-president in charge of Mongolian operations at South Gobi Resources, said deliveries from the company's mine were not affected. "The block is just from the Tavan Tolgoi area -- they have not stopped shipments from our mine," he said.