Mongolia to Offer Tavan Tolgoi Mine to ‘3 or 4’ Bidders, PM Says
Mongolia may share its Tavan Tolgoi coal mining project between a majority of the six bidders shortlisted by the government and ask them to work together, Prime Minister Sukhbaatar Batbold said in an interview today.
“There are going to be about three or four of the major ones to create one consortium,” Batbold told Bloomberg Television in Beijing, concluding his three-day state visit to China. The final decision is “very close.”
Coal production in Mongolia doubled last year to become the nation’s top export earner, spurring the government to push through development of one of the world’s biggest unexploited deposits of the mineral. Peabody Energy Corp. (BTU), a Shenhua Group Corp.-Mitsui & Co. venture, Vale SA, a Russia-Japan-South Korea group, ArcelorMittal (MT), and Xstrata Plc (XTA) were all shortlisted.
Mongolia is trying to seek a “balance of interests” in its relations with neighbors like Russia and China and Western countries, he said. “This balance has to be kept not by squeezing somebody, but increasing” the opportunities from cooperation, he said.
“We would like to make this happen as soon as possible because quickly it can generate the revenue and it’s good for the country,” Batbold said.
Talks were underway on the contract for the central and western part of the site, Baterdene Ragchaa, a spokesman for Erdenes MGL LLC, the state-controlled owner of the deposit, said on March 31.
Seeking Expertise
Mongolia will this month announce the winning bid to develop the deposit, Xinhua News Agency said May 19, citing unidentified local media.
The nation is seeking mining expertise and infrastructure development, including railway construction, Erdenepurev Amarkhuu, director-general of fuel policy at the Ministry of Mineral Resources, said in April. Mongolia is also targeting “value-added production” in areas including coal-to-liquid and coal-to-gas projects, he said then.
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. Tsankhi has been split into the western bloc, which will be developed by the winners of the tender, and the eastern side, which will be mined by Erdenes TavanTolgoi, a unit of Erdenes MGL.
Batbold and Chinese counterpart Wen Jiabao oversaw the signing of nine agreements in Beijing yesterday, including one for a $500 million loan to Mongolia from China.
The other agreements included economic and technological cooperation, the protection of cultural relics, and education.
“China is a good neighbor and a strategic partner,” Batbold said today. Cooperation will benefit both countries as Mongolia has resources China needs, while China can provide the “markets and potential” for Mongolia’s economic development, he said.
Mongolia doesn’t want to be only a supplier of raw materials, Batbold said. “We would like to direct the financing opportunities to the industries to create more value, more technology and more environmentally friendly approaches.”
--Wang Ying and Stephen Engle. Editor: Ben Richardson, Andrew Hobbs
To contact the reporter on this story: Ying Wang in Beijing at ywang30@bloomberg.net
To contact the editor responsible for this story: Amit Prakash at aprakash1@bloomberg.net.
“There are going to be about three or four of the major ones to create one consortium,” Batbold told Bloomberg Television in Beijing, concluding his three-day state visit to China. The final decision is “very close.”
Coal production in Mongolia doubled last year to become the nation’s top export earner, spurring the government to push through development of one of the world’s biggest unexploited deposits of the mineral. Peabody Energy Corp. (BTU), a Shenhua Group Corp.-Mitsui & Co. venture, Vale SA, a Russia-Japan-South Korea group, ArcelorMittal (MT), and Xstrata Plc (XTA) were all shortlisted.
Mongolia is trying to seek a “balance of interests” in its relations with neighbors like Russia and China and Western countries, he said. “This balance has to be kept not by squeezing somebody, but increasing” the opportunities from cooperation, he said.
“We would like to make this happen as soon as possible because quickly it can generate the revenue and it’s good for the country,” Batbold said.
Talks were underway on the contract for the central and western part of the site, Baterdene Ragchaa, a spokesman for Erdenes MGL LLC, the state-controlled owner of the deposit, said on March 31.
Seeking Expertise
Mongolia will this month announce the winning bid to develop the deposit, Xinhua News Agency said May 19, citing unidentified local media.
The nation is seeking mining expertise and infrastructure development, including railway construction, Erdenepurev Amarkhuu, director-general of fuel policy at the Ministry of Mineral Resources, said in April. Mongolia is also targeting “value-added production” in areas including coal-to-liquid and coal-to-gas projects, he said then.
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. Tsankhi has been split into the western bloc, which will be developed by the winners of the tender, and the eastern side, which will be mined by Erdenes TavanTolgoi, a unit of Erdenes MGL.
Batbold and Chinese counterpart Wen Jiabao oversaw the signing of nine agreements in Beijing yesterday, including one for a $500 million loan to Mongolia from China.
The other agreements included economic and technological cooperation, the protection of cultural relics, and education.
“China is a good neighbor and a strategic partner,” Batbold said today. Cooperation will benefit both countries as Mongolia has resources China needs, while China can provide the “markets and potential” for Mongolia’s economic development, he said.
Mongolia doesn’t want to be only a supplier of raw materials, Batbold said. “We would like to direct the financing opportunities to the industries to create more value, more technology and more environmentally friendly approaches.”
--Wang Ying and Stephen Engle. Editor: Ben Richardson, Andrew Hobbs
To contact the reporter on this story: Ying Wang in Beijing at ywang30@bloomberg.net
To contact the editor responsible for this story: Amit Prakash at aprakash1@bloomberg.net.
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