Mongolia to Take Bids for Tavan Tolgoi Coal Deposit Contractor Next Month

Mongolia will take bids for a contractor to mine Tavan Tolgoi, one of the world’s largest untapped deposits of steel-making coal, next month, said the country’s minister for minerals and energy.

“The bidding for the operator will be done in early October,” Dashdorj Zorigt said in an interview in the Chinese city of Tianjin today.

Mongolia, which shares a border with China and Russia, wants to retain ownership of new mines including Tavan Tolgoi, which holds more than 6 billion metric tons of coal. Among the companies that have said they are keen to develop Tavan Tolgoi is China Shenhua Energy Co., the biggest Chinese coal producer.

The nation expects to set up a state-controlled company, Erdenes Tavan Tolgoi, to oversee the deposit before the start of the mining season in April, Zorigt said on Aug. 3.

“The government is in the process of appointing an independent board and CEO for the Tavan Tolgoi company,” he said today.

Mongolia plans to sell 30 percent of the company controlling Tavan Tolgoi in share sales to help fund $1.5 billion of initial development cost, the minister said on July 8. The shares will be sold in Mongolia and overseas.

The government hasn’t decided which overseas stock market will handle the sale, Zorigt said today.

To contact the Bloomberg staff on this story: Baizhen Chua in Tianjin at bchua14@bloomberg.net