S.Korean group says bids for Mongolia coal mine

* S.Korea forms consortium with Russia, Japan

* Preferred bidders likely to be decided by mid-Feb

* Tsankhi block estimated to have 1.2 bln T of coal reserves

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SEOUL, Feb 1 (Reuters) - State-run Korea Resources Corp said on Tuesday its consortium had submitted a bid to develop Mongolia's huge Tavan Tolgoi coal mine, regarded as one of the world's biggest untapped reserves.

The group, formed of nine Korean firms, two Russian firms and four Japanese companies, is competing against a consortium led by Mitsui & Co (8031.T: Quote) for the Tsankhi block, which is estimated to have 1.2 billion tonnes of coal reserves.

The Mongolian government plans to keep ownership of the mine, estimated to house a total 5 billion tonnes of coal reserves, and give strategic investors a chance to develop its western block on a contract basis.

"Mongolia has rich untapped reserves and the block in the auction is very attractive, as it is one of the few large-sized coal mines in the world left undeveloped," Korea Resources Corp said in a statement.

Its consortium members include steelmaker POSCO (005490.KS: Quote), utility firm KEPCO (015760.KS: Quote), trading firms LG Corp (003550.KS: Quote) and Daewoo International Corp (047050.KS: Quote), Russian Railways and Japanese trading firm Itochu Corp (8001.T: Quote).

Sources told Reuters on Monday Itochu group and a separate bidder led by Mitsui were participating in the auction.

Source:Reuters News Wire Services