In 2022, Mongolia emerged as the world’s 10th largest exporter of copper ore, with exports totaling an impressive $2.7 billion. The majority of these copper exports are directed almost exclusively to China, Mongolia’s key trading partner in this sector. However, discussions are underway to diversify the routes through which Mongolian copper ore reaches global markets.
Officials have identified the Chinese port of Tianjin and the Russian port of Vladivostok as potential routes for Indian smelters to procure copper concentrate shipments from Mongolia. There is a possibility that Indian companies may send delegations to Mongolia in October to explore these opportunities further.
Currently, the logistics of exporting copper from Mongolia are limited to two primary options: transporting shipments by rail to Tianjin or utilizing a combination of road and rail transport to reach Vladivostok. According to sources familiar with the situation, these routes present logistical challenges due to the distances involved by Adani and Birla.
The major copper mines in Mongolia are located approximately 1,000 kilometers from Tianjin, making it a relatively short and feasible option. In contrast, the distance to Vladivostok exceeds 4,000 kilometers, presenting a significantly more complex and extended transportation challenge.
India’s copper demand is on the rise, with ICRA projecting an 11 percent increase in demand for the commodity in the 2024-25 fiscal year. Copper is a crucial raw material for a wide range of industries, and its demand is often regarded as a key indicator of economic activity.
Refined copper is indispensable in the manufacture of electrical components such as wiring and motors, as well as consumer electronics, construction materials, and renewable energy technologies like electric vehicle batteries and wind turbines.
When examining India’s trade relationship with Mongolia, it becomes evident that the bilateral trade balance is heavily skewed in favor of Indian exports. In the last fiscal year, India’s imports from Mongolia amounted to goods worth Rs 8.5 crore, with the bulk of these imports consisting of wool yarn and fabric, inorganic chemicals, and leather.
On the other hand, India exported goods worth Rs 275 crore to Mongolia, further highlighting the trade disparity between the two nations. The potential for increased copper imports from Mongolia represents a significant opportunity for India, particularly as the nation seeks to meet its growing demand for this essential industrial metal.
As both countries continue to explore and strengthen their trade relations, the development of new transportation routes and logistical solutions will be critical to facilitating the efficient flow of copper and other goods between Mongolia and India.
