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July 6, 2015

Mongolia contemplates sale of stake in $4bn Tavan Tolgoi coal mine

Mongolia is reportedly planning to divest stake in its $4bn Tavan Tolgoi coal mine to help attract foreign investment in the country.

Tavan Tolgoi

Mongolia is reportedly planning to divest stake in its $4bn Tavan Tolgoi coal mine to help attract foreign investment in the country.

Bloomberg quoted Erdenes Mongol chief executive Byambasaikhan Bayanjargal saying in May that within a period of two months, an agreement to develop the mine may be finalised.

The Tavan Tolgoi mine is located in the South Gobi desert and considered to play a vital role in Mongolia to convert its mineral wealth into economic gains.

With estimated reserves of 6.4 billion tonnes, the mine produces coal that can be used in steelmaking.

Divided into Tsankhi, Ukhaa Khudag, Bor tolgoi, Borteeg and south-west and eastern coalfields sections, the Tavan Tolgoi is located in the Ömnögovi Province in southern Mongolia.

One quarter of the total estimated resource is said to be high-quality coking coal.

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"With estimated reserves of 6.4 billion tonnes, the mine produces coal that can be used in steelmaking."

Government-owned company Erdenes has complete ownership of the mind, with the Ukhaa Khudag section mined by the Mongolian Mining Corporation.

Tavan Tolgoi is 15km south-west from Tsogttsetsii sum centre, 98km east from Ömnögovi Province centre Dalandzadgad, 150km from Oyu Tolgoi, and around 240km north of the Chinese border.

As the project is located in an area where there are no roads and railways to ship the coal to markets, it needs more foreign financial contributions.

The country is also planning to sell stakes in ten state-owned companies later this year.


Image: Tavan Tolgoi is located in the Ömnögovi Province in southern Mongolia. Photo: courtesy of Brücke-Osteuropa.

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