Mongolia's large mining deal with int'l miners rejected

Mongolia's large mining deal with int'l miners rejected
2011-09-13 15:14:12.336 GMT
     ULAN BATOR, Sep 13, 2011 (Xinhua via COMTEX) -- A
tentative investment agreement on giant coking coal deposit
Tavan Tolgoi in Mongolia's South Gobi region has been rejected
by the National Security Council, Mongolian President Tsakhia
Elbegdorj was quoted as saying by local media on Tuesday.
     The council, comprised of the president, prime minister
and speaker of the parliament, rejected last Friday the draft
investment agreement with international miners on stake
ownership and production of the deposit.
     Early in July, the Mongolian government reached a
tentative deal, under which China's Shenhua Energy Company,
U.S. Peabody Energy Corporation and a Russian-Mongolian
consortium would respectively hold 40 percent, 24 percent and
36 percent of the shares.
     However, Elbegdorj said the deal did not meet requirements
of the council nor was it compliant with Mongolian laws and
regulations, thus was submitted to the National Security
Council on July 22 for review.
     Currently, the giant coking coal deposit is split into
five separate sections, and four local companies own mining
licenses in the deposit.
     Local media assumed the splitting of the large deposit
into smaller parts to be a cause for the rejection and reported
the government is discussing with two licensed private
companies to consolidate their working area with state-owned
Erdenes MGL company.
     It is not clear whether the Mongolian government will re-
negotiate with the international bidders for the development of
West Tsankhi area of the deposit with an estimated reserve of
1.2 billion tons -- mostly coking coal used for steelmaking.
     The mine is capable of producing 15 million tons of coal
annually for more than 30 years, which is believed to be able
to boost Mongolia's economy.

Source:XINHUA NEWS AGENCY