Federal Register, Volume 76 Issue 109 (Tuesday, June 7, 2011)

[Federal Register Volume 76, Number 109 (Tuesday, June 7, 2011)]
[Notices]
[Pages 32951-32953]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-13921]

[[Page 32951]]

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DEPARTMENT OF COMMERCE

International Trade Administration

Coal Mining Equipment, Technologies and Services Trade Mission to
China and Mongolia

AGENCY: International Trade Administration, Department of Commerce.

ACTION: Notice.

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Mission Description

The United States Department of Commerce, International Trade
Administration, U.S. and Foreign Commercial Service is organizing an
Executive-led Trade Mission to China and Mongolia for U.S. companies
operating in the coal and mining sector and manufacturing or
distributing mining and mining-safety equipment. The trade mission,
scheduled for October 23-28, 2011, will begin October 23 in Mongolia's
capital of Ulaanbaatar, followed October 25-28 by the China portion of
the mission, which will visit two cities--Xi'an and Beijing. The
mission will include individual participant meetings tailored to each
company's goals as well as appropriate government meetings. The mission
will conclude at the China Coal and Mining Expo taking place October
28-31, 2011 in Beijing.

Commercial Setting

China

China is the United States' second-largest trading partner and the
world's second-largest economy. Last year, U.S. manufactured exports to
China were close to $92 billion. Since 2000, U.S. exports to China have
more than quintupled. The Chinese government has announced an annual
growth target of 7 percent over the next five years, which is regarded
as a conservative estimate.
China is the largest coal producer in the world, with about 45% of
the world's total annual production. As energy demand increases for its
rapid economic development, China's coal production is growing yearly.
For the past three years, the country's coal production was 2.7 billion
tons, 2.9 billion tons, and 3.2 billion tons respectively. It is
expected to reach 4 billion tons in 2011. Coal currently accounts for
between 65-70% of China's primary energy supply, and demand for coal is
forecast to grow 3.2% annually through 2030.
About 90% of the coal mining equipment used in China is produced
domestically. However, Chinese companies are still behind
technologically in mining equipment production.
China is also the world's largest emitter of greenhouse gases
(GHGs), responsible for over 20% of annual CO2 emissions from burning
fossil fuels. Eighty percent of these emissions come from coal.
Domestic scarcity of high-quality, cleaner-burning coal poses an
additional challenge.
While coal usage efficiency has improved in China, it remains low
compared with developed countries. Power generation accounts for 48% of
China's coal consumption and a large proportion of flue gas remains
untreated prior to emission.
China welcomes foreign participation in the clean-coal sector,
including improving the efficiency and clean use of coal. However,
significant challenges remain, particularly industry fragmentation,
which limits both the quality of the coal that is mined and the ability
of coal companies to invest in newer, cleaner technologies. Stronger
and more uniform application of standards and incentives is also
needed.

Mining

U.S. companies enjoy their greatest competitive advantage in
supplying heavy coal mining machines and systems. For underground
mining operations, U.S. firms compete well in the following categories:
long-wall shearers, stage-loaders, continuous miners, batch haulage
vehicles, road headers, hydraulic roof support systems and conveyor
systems. For open-pit mining, U.S. firms' best opportunities include
electric mining shovels, walking draglines, blast hole drills, and
heavy mining trucks.

Coal Mine Safety

Coal mine safety remains a critical issue in China. In 2007, China
saw 3,786 deaths in coal mine accidents. In order to address the issue
of safety, the Chinese government closed 2,969 small coal mines (below
30,000 tons of production capacity) considered unsafe.
The Chinese government requires all coal mine sites to install a
complete safety system, which includes a monitoring system, life
shelters, communications system, personnel positioning system, and
ventilation and water system. According to the State Administration of
Coal Mine Safety Supervision, China is aggressively purchasing safety
equipment for large state-owned coal mines. China will spend billions
of dollars over the next five years to improve safety in its 10,000-
plus coal mines. Many analysts predict that China will need to invest
over $151 billion in coal infrastructure by 2020. Part of this
investment will cover improvements for coal mine safety.
This creates significant opportunities for foreign companies to
export coal-mine safety equipment to China. Best prospects also include
gas control systems and fire and gas monitoring and control equipment.
The industry will see continued consolidation and a push toward bigger,
safer and more modern mines. This is part of the overall policy goal of
increasing efficiency, safety and reducing waste.

Clean Coal

Clean coal solutions can be divided into three categories based
upon the stage of energy production: pre-combustion, conversion and
combustion, and post-combustion. U.S. suppliers enjoy good prospects in
all three categories.
Pre-combustion: advanced and energy efficient coal-mining
equipment, coal blending, coal screening and scrubbing.
Conversion and combustion: coal liquefaction, gas-turbine
technology, Integrated Gasification Combined Cycle (IGCC), Ultra
Supercritical Power Generation (USPG), Underground Coal Gasification
Combined Cycle (UCGCC).
Post-combustion: Carbon Capture and Sequestration (CCS), Flue Gas
Denitration (De-NOx), Flue Gas Desulphurization (De-
SOx), Particulate Matter (PM) removal.

Mongolia

Mongolia is a vast country with rich natural resources, including
coal, copper, molybdenum, tin, tungsten, and gold, making mining the
most important sector for Mongolia's economic development. Its world-
class mineral deposits have attracted considerable investment in recent
years--over $600 million in direct foreign investment in 2010. The
landmark Oyu Tolgoi Copper-Gold Mining Project Investment Agreement
signed in 2009 between the Mongolian government, Ivanhoe Mines and Rio
Tinto has so far brought over $2 billion into Mongolia.
Mining is crucial to Mongolia's development and the mining sector
has been a major contributor to the country's GDP. Once major mining
projects go into production, Mongolia should see a significant increase
in GDP growth, estimated at over 13% for 2011-12. This development
undoubtedly will be accompanied by a surge in mining-related imports of
plant and machinery. Furthermore, the expansion of the mining sector
will have a far-reaching effect on other sectors.

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Mongolia has enormous coal reserves estimated at some 100 billion
metric tons. In addition, Mongolia's immediate proximity to the world's
largest consumer of coal--China--makes the country's coal exploration
prospects very attractive, as Mongolia's role in the world coal market
grows in importance.
In 2010 coal overtook copper as Mongolia's most important export,
accounting for 30% of exports. The country's coal output is projected
to grow at an annual average rate of 62.3%, reaching 16.2 million tons
per annum by 2015. The Mongolian Government recently invited tenders
for two contracts associated with Tavan Tolgoi, one of the world's
largest coal deposits. Companies from Russia, Australia, South Korea,
Japan, the U.S., India and China are reported to be among the consortia
bidders. Licenses for the mine will be held by the state-controlled
Erdenes Tavan Tolgoi. The government is preparing for an initial public
offering (IPO) for this firm. The IPO is likely to raise several
billion U.S. dollars that will help to fund the development of the mine
and associated infrastructure.
Mongolia has improved its business environment over the past
decade. Most important, the government recently rescinded the 68% tax
on windfall profits on Mongolian copper and gold, which was a great
impediment to foreign investment into the country.

Mission Goals

The goals of the mission are to help participating companies
initiate or expand their exports to China and Mongolia through
introductions to industry representatives and potential partners,
networking opportunities, current market information and policy
discussions with national, provincial and municipal authorities.
This trade mission will permit U.S. companies to showcase
effective, state-of-the-art equipment and technologies and to
understand underlying issues in their market sector.

Mission Scenario

U.S. firms will need to work with key players, including government
regulators, academicians, industry associations, financial
institutions, major clean-coal operators (coal, power, and oil and gas
companies) to make sure to get a firm foothold in the market. The
mission will begin with the stop in Ulaanbaatar, then proceed to Xi'an,
capital of Shaanxi Province, one of China's lead coal-producing
regions, and conclude in Beijing. At each stop participants will meet
with provincial officials and potential private-sector partners. The
mission will end in Beijing, where participants will meet with central-
government officials of the State Administration of Coal Mine Safety
and National Energy Administration, and with private-sector
entrepreneurs at the China Coal & Mining Expo trade show.
The participants will attend policy, market and commercial
briefings by the U.S. Commercial Service as well as networking events
which offer further opportunities to speak with local business and
government representatives. Participation in the mission will include
the following:
Pre-travel briefings/webinar on subjects ranging from
business practices in China to security;
Pre-scheduled meetings with potential partners,
distributors, end users, or local industry contacts in Ulaanbaatar,
Xi'an and Beijing;
Meetings with government officials in Ulaanbaatar, Xi'an
and Beijing;
Airport transfers in Ulaanbaatar, Xi'an and Beijing;
Meetings with state government and municipal officials in
Mongolia and China; and,
Networking receptions.

Proposed Timetable
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Saturday, October 22, 2011............. Ulaanbaatar
Participants arrive
in Ulaanbaatar via Beijing
or Seoul/check-in and rest
overnight.
Sunday, October 23, 2011............... Ulaanbaatar
Welcome briefing at
hotel.
Morning and
afternoon free.
Evening reception.
Monday, October 24, 2011............... Ulaanbaatar--Beijing
Group meetings with
government officials and
Mongolian companies.
Evening departure
for Beijing.
Overnight in
Beijing (airport hotel).
Tuesday, October 25, 2011.............. Beijing--Xi'an
Morning travel to
Xi'an.
Afternoon meetings
with government officials
and Chinese companies.
Evening reception.
Wednesday, October 26, 2011............ Xi'an--Beijing
Meetings with
government officials and
Chinese companies.
Afternoon travel to
Beijing.
Thursday, October 27, 2011............. Beijing
Meetings with
government officials and
Chinese companies.
Optional set up for
expo participants.
Evening reception.
Friday, October 28, 2011............... Beijing
Opening ceremony of
China Coal & Mining Expo.
Trade show tour.
Meetings with
government officials and
Chinese companies.
Official end of
trade mission.
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Participation Requirements

All applicants will be evaluated on their ability to meet certain
conditions and best satisfy the selection criteria as outlined below.
The mission is designed to select a minimum of 15 U.S. companies to
participate in the mission from the applicant pool. U.S. companies
already doing business in the target

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markets as well as U.S. companies seeking to enter these markets for
the first time should apply.

Fees and Expenses

After a company has been selected to participate in the mission, a
payment to the Department of Commerce in the form of a participation
fee is required.
For the entire mission (China and Mongolia), the fee will be $6,245
for large firms and $5,475 for small and medium-size enterprises
(SMEs,\1\ i.e., companies with no more than 500 employees).
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\1\ An SME is defined as a firm with 500 or fewer employees or
that otherwise qualifies as a small business under SBA regulations.
See http://www.sba.gov/contractingopportunities/owners/basics/whatismallbusiness/index.html. Parent companies, affiliates, and
subsidiaries will be considered when determining business size. The
dual pricing reflects the Commercial Service's user fee schedule
that became effective May 1, 2008. See http://www.export.gov/newsletter/march2008/initiatives.html.
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For China only, the fee will be $4,995 for large firms and $4,500
for SMEs. The fee for each additional participant per company will be
$725.
For Mongolia only, the fee will be $1,250 for large firms and $975
for SMEs. The fee for each additional participant per company will be
$200.
Expenses for travel, lodging, most meals, and incidentals will be
the responsibility of each mission participant.

Conditions for Participation

An applicant must submit a completed and signed mission
application and supplemental application materials, including adequate
information on the company's products and/or services, primary market
objectives, and goals for participation. If the U.S. Department of
Commerce receives an incomplete application, the Department may reject
the application, request additional information, or take the lack of
information into account when evaluating the applications.
Each applicant must also certify that the products and
services it seeks to export through the mission are either produced in
the United States, or, if not, marketed under the name of a U.S. firm
and have at least 51 percent U.S. content of the value of the finished
product or service.

Conditions for Participation

Selection Criteria for Participation

Suitability of the company's products or services to the
Chinese and/or Mongolian markets and targeted sector.
Consistency of the applicant's goals and objectives with
the stated scope and design of the mission.
Applicant's potential for business in China and/or
Mongolia, including likelihood of exports resulting from the mission.
Diversity of company size, type, location, and demographics, may
also be considered during the review process.
Referrals from political organizations and any documents containing
references to partisan political activities (including political
contributions) will be removed from an applicant's submission and not
considered during the selection process.

Selection Timeline

Mission recruitment will be conducted in an open and public manner,
including publication in the Federal Register (http://www.gpoaccess.gov/fr), posting on ITA's trade mission calendar--http://www.trade.gov/trade-missions--and other Internet Web Sites, press
releases to general and trade media, direct mail, broadcast fax,
notices by industry trade associations and other multiplier groups, and
publicity at industry meetings, symposia, conferences, and trade shows.
Recruitment for the mission will begin immediately, and conclude
August 12, 2011, unless extended by the Department of Commerce.
Applications received after August 12, 2011, will be considered only if
space and scheduling constraints permit.
The U.S. Department of Commerce will inform applicants of selection
decisions as soon as possible after August 12, 2011.

Contacts

U.S. Commercial Service--HQ

Mr. Louis Quay, International Trade Specialist, U.S. Commercial
Service, HQ, Tel: 202-482-3973, E-mail: [email protected].

U.S. Commercial Service China

Mr. Andrew Billard, U.S. Commercial Service, Beijing, Tel: 86-10-
8531-3589, E-mail: [email protected].

Elnora Moye,
U.S. Department of Commerce, Commercial Service Trade Mission Program,
Tel: 202-482-4204, E-mail: [email protected].
[FR Doc. 2011-13921 Filed 6-6-11; 8:45 am]
BILLING CODE 3510-FP-P