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December 22, 2014

Shenhua Energy, Sumitomo and Energy Resources to develop Tavan Tolgoi in Mongolia

A Consortium of China's Shenhua Energy, Japan's Sumitomo and Mongolia’s Energy Resources has won the tender to develop the Tavan Tolgoi deposit in Mongolia.

Tavan Tolgoi

A Consortium of China’s Shenhua Energy, Japan’s Sumitomo and Mongolia’s Energy Resources has won the tender to develop the Tavan Tolgoi deposit in Mongolia.

The consortium is said to have beat a bid from US-based mining company Peabody Energy.

Mongolia’s Government will retain full ownership of the mine, which is claimed to be one of the world’s largest untapped coking and thermal coal deposits situated in the Ömnögovi Province.

The latest bid winner will have to produce 30 million tonnes of coal annually at Tavan Tolgoi and deliver into at least two export markets.

Ulaanbaatar-based Mongolian Mining’s unit Energy Resources already mines coal at another site in the Tavan Tolgoi coal basin.

"Located around 240km north of the Chinese border, Tavan Tolgoi has 7.4 billion tonnes of coal reserves."

Recently, in an effort to boost a flagging economy hit by falling commodity prices, Mongolia has relaunched an international tender to develop the project.

The attempt is said to have attracted Mongolia Mining, Peabody Energy and Japan’s Itochu.

Located around 240km north of the Chinese border, Tavan Tolgoi has 7.4 billion tonnes of coal reserves.

The mine is divided into six sections: Tsankhi, Ukhaa Khudag, Bor tolgoi, Borteeg and south-west and eastern coalfields.

It is considered to be crucial to the efforts of Mongolia to convert its mineral wealth into economic gains.


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

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