Japanese Companies To Bid For Mongolia Tavan Tolgoi Mine Development

TOKYO, Dec 27, 2010 (Dow Jones Commodities News via Comtex) --

A consortium of four Japanese trading houses plans to bid for partial development of Mongolia's coal deposits of more than 6 billion metric tons, spokesmen of three of the four companies said Monday.

The consortium of Itochu Corp. (8001.TO), Sumitomo Corp. (8053.TO), Sojitz Corp. (2768.TO) and Marubeni Corp. (8002.TO) plans to bid during a tender by the Mongolian government scheduled for Jan. 17 on developing part of the Tavan Tolgoi mine in the southeast, said the spokesmen of Itochu, Sumitomo Corp. and Sojitz. Marubeni wasn't immediately available for comment.

Coal prices have soared in recent three years tracking greater consumption by China.
The four Japanese trading firms are also considering inviting South Korean and Russian companies to bid together, but the matter hasn't been decided, the spokesmen said.
The Tavan Tolgoi mine is expected to produce coking coal. If the Japanese consortium wins the tender, Sumitomo Corp. and Sojitz would supply a major part of the mine's coal to Japanese steel makers, the spokesman said.
The Itochu spokesman said the company views China as a major marketing target for the coal since China is geographically closer to the mine.
Meanwhile, Japanese media have reported that Mitsui & Co. (8031.TO) and Chinese coal miner Shenhua Group Corp. are discussing a joint bid with U.S. coal giant Peabody Energy Corp. (BTU) for the same tender. Mitsui's spokesman wasn't immediately available for comment.

By Mari Iwata, Dow Jones Newswires; 813-6269-2798; mari.iwata@dowjones.com

Source:Dow Jones Newswires