Tavan Tolgoi

A $4bn deal to develop Mongolia’s Tavan Tolgoi coal mine has been thrown into doubt due to economic troubles faced by China amid volatile markets, according to a Mongolian minister.

Reuters reported Mongolia chief negotiator minister Mendsaikhan Enkhsaikhan at an investor conference in Ulaanbaatar as saying that lawmakers may not clear the deal.

In April, the country’s parliament speaker blocked a plan for a consortium of Mongolian Mining, China-based Shenhua Energy and Japan’s Sumitomo to acquire the operations of Erdenes’s Tavan Tolgoi coal mine.

Following the decision, the future of the deal was left to the lawmakers.

"The coal mine has an estimated 6.4 billion tonnes of total resources."

Enkhsaikhan said: "When we submitted the proposed agreement for the Tavan Tolgoi coal mine project, I said there was a 50-50 chance for approval."

In July, Mongolia announced plans to divest stake in the mine in a bid to help attract foreign investment in the country.

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By GlobalData

Located in the Ömnögovi Province in southern Mongolia, the coal mine has an estimated 6.4 billion tonnes of total resources.

Tavan Tolgoi is divided into six sections including Tsankhi, Ukhaa Khudag, Bor tolgoi, Borteeg, and South-west and Eastern coalfields.

The mine is 100%-owned by state company Erdenes, while the Ukhaa Khudag section is mined by Mongolian Mining.

Image: Coal mine of Tavan Tolgoi JSC. Photo: courtesy of Brücke-Osteuropa.