Companies Chosen to Develop Tavan Tolgoi Mine

hina Shenhua Energy Co., Peabody Energy Corp. (BTU) and a Russian-Mongolian group were picked to develop Mongolia’s Tavan Tolgoi deposit, potentially the world’s largest untapped coking coal reserve.

A Shenhua-led group will get a 40 percent share in the project, while Peabody will hold 24 percent and the Russian- Mongolian venture 36 percent, according to a statement dated yesterday on the Mongolian government website. The other bidders were Vale SA (VALE3), ArcelorMittal (MT) and Xstrata Plc. (XTA)

“The government has awarded the tender to companies that have the cash reserves and expertise to build this large mine and infrastructure,” Matthew Trivett, a research analyst at Patersons Securities Ltd., said by phone from Sydney. “This is a positive step for the Mongolian economy.”

Coal demand is rising as China and India, the world’s fastest growing major economies, produce more electricity and steel. Supply disruptions in Australia, the world’s biggest coal exporter, because of record rainfall and rail and port bottlenecks have pushed up prices to a record this year.

Mongolia’s coal production doubled last year to 25 million metric tons to become the nation’s top export earner, spurring the government to push through development of mines. Tavan Tolgoi spans some 68,000 hectares (168,000 acres), with coking coal used in steelmaking located mainly in the central Tsankhi area, according to Erdenes MGL, the state-controlled owner of the deposit.

Calls to the offices of ArcelorMittal spokespeople Giles Read in London and Arne Langner in Luxembourg went unanswered. Xstrata spokesman James Rickards and Brett Fraser, an Australia- based spokesman for Vale, didn’t respond to messages left on their mobile phones.
Parliament Approval

The government will submit the shareholding plan to parliament next week for approval, the statement said. Mongolia may share its Tavan Tolgoi project between three or four of six shortlisted bidders, Prime Minister Sukhbaatar Batbold said on June 17.

Shenhua board secretary Huang Qing didn’t respond to messages left on his office phone by Bloomberg News.

Shenhua was originally listed as partner of Mitsui & Co. in the bid and the Russian-led group had comprised companies from Japan and South Korea. The statement made no mention of Mitsui or Japanese and South Korean companies.

Tsankhi is split into the western block that will be developed by the winners of the tender, and the eastern side, which will be mined by Erdenes TavanTolgoi, a unit of Erdenes. West Tsankhi holds more than 1 billion metric tons of coal, 68 percent of which can be used for steelmaking and the rest as fuel in power plants.

West Tsankhi is located in the South Gobi region of the country, 270 kilometers (170 miles) north of the Chinese border. The nearest port is China’s Tianjin, 1,570 kilometers away, with the closest Russian port of Vanino more than three times the distance, according to a November presentation by the Mongolian government.

To contact the reporter on this story: Chua Baizhen in Beijing at bchua14@bloomberg.net

To contact the editor responsible for this story: Ryan Woo at rwoo5@bloomberg.net

Source:Bloomberg




Share:

0 comments:

Post a Comment

Facebook page

Powered by Blogger.

Categories

Advertising in Mongolia An Culture Editorial of the Mongolianviews education Environmental protection Famous Mongolians Foreigners in Mongolia Inner Mongolia Ivanhoe Mines Mongolia agriculture Mongolia analysis Mongolia and Australia Mongolia and Belorussia Mongolia and Cambodia Mongolia and Canada Mongolia and central Asia Mongolia and China Mongolia and Cuba Mongolia and EU Mongolia and Germany Mongolia and Hongkong Mongolia and Hungary Mongolia and India Mongolia and Inner Mongolia Mongolia and Iran Mongolia and Italy Mongolia and Japan Mongolia and Kazakhstan Mongolia and Korea Mongolia and Kuwait Mongolia and Malaysia Mongolia and Nato Mongolia and North Korean Mongolia and Poland Mongolia and Russia Mongolia and Singapore Mongolia and South Korea Mongolia and Taiwan Mongolia and the world Mongolia and Tibet Mongolia and Turkey Mongolia and UK Mongolia and Ukraine Mongolia and UN Mongolia and USA Mongolia and Vietnam Mongolia Banking Mongolia civic society Mongolia crime Mongolia diplomacy Mongolia Economy Mongolia Education Mongolia Energy Mongolia Finance Mongolia Health Mongolia History Mongolia holiday Mongolia in international media Mongolia Industries Mongolia Joke Mongolia law Mongolia LGBT Mongolia medical Mongolia military Mongolia Mining Mongolia Mining Developments Mongolia Mortgage Mongolia natural disaster Mongolia Petroleum Mongolia public announcements Mongolia railways Mongolia Religion Mongolia society Mongolia Sports Mongolia Stamp Mongolia telecommunication Mongolia tourism Mongolia Urbanization Mongolia Wild Life Mongolian Agriculture Mongolian Archeology Mongolian Food Mongolian Gay Mongolian Government news Mongolian History Mongolian Military Mongolian Mining Development Mongolian Movie Mongolian News Mongolian Parliament Mongolian Political news Mongolian Press Mongolian Songs Mongolian Women Mongolian Youth Mongolians abroad Moninfo Opinion Oyu Tolgoi Investment Agreement Photo news Press Release Rio Tinto Tavan Tolgoi coal mine Ulaanbaatar development Weird expatriates in Mongolia

Blog Archive

Followers

Live Traffic