Mongolia to pick more than 1 winner for Tavan Tolgoi coal mine

By Fayen Wong

(Reuters) - Mongolia plans to pick more than one winner in bidding to develop the Tavan Tolgoi coal mine, with results expected in May, a government official said on Wednesday.

ArcelorMittal , Vale and Xstrata are among six bidders short-listed to develop the mine, the world's largest untapped coking coal deposit. [ID:nL3E7E70CI]

U.S. coal miner Peabody , a consortium of Chinese energy firm Shenhua and Japan's Mitsui & Co , and a separate consortium of Japanese, South Korean and Russian firms are the other preferred bidders.

"It is likely that there will be more than one winner ... We will make a combination of the six bidders," Erdenepurev Amarkhuu, director general of the fuel department of the Mongolian Ministry of Mineral Resources, told reporters on the sidelines of an industry conference in Beijing.

The government is still considering all six bidders and has not eliminated any party from the list.

Amarkhuu said key issues being discussed include the investment amount, percentage of upfront payment, construction of infrastructure, safety and environmental considerations as well as the development of other value-added projects.

"We are looking for someone who can also bring in new technology and potentially develop things such as coal-to-gas, coal-to-liquids or coal upgrading projects," he said.

The government is also hoping the final winners will use Mongolians for as much as 90 percent of the project's total workforce, as an effort to create jobs and train workers.

"Strategic investors can first bring in foreign workers but they will then make Mongolians into qualified personnel to replace the foreigners," Amarkhuu said.

The six bidders are vying to develop Tavan Tolgoi's west Tsankhi block, which has 1.2 billion tonnes of coal reserves and could produce 15 million tonnes annually for more than 30 years.

Mongolia is widely regarded as one of the last mining frontiers. Some analysts say it could be one of the fastest growing economies of the next decade because of its vast quantities of untapped mineral wealth. (Editing by Jacqueline Wong and Michael Urquhart)

Source:Reuters news services




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