Erdenes to Supply Coal to East Asian Firms

1 August 2011 (Last Updated August 1st, 2011 18:30)

Erdenes Tavan Tolgoi has signed agreements with Chinese, Japanese and South Korean firms to supply coal from its Tavan Tolgoi coking coal project in Mongolia. Erdenes will supply a total of 15 million metric tons of coal from its East Tsankhi deposit, and will receive a signing bonus o

Erdenes Tavan Tolgoi has signed agreements with Chinese, Japanese and South Korean firms to supply coal from its Tavan Tolgoi coking coal project in Mongolia.

Erdenes will supply a total of 15 million metric tons of coal from its East Tsankhi deposit, and will receive a signing bonus of $250m, which will be used for a mine development and human development fund.

Chinese firms Aluminum Corp of China and an unnamed steel firm will receive 70% of the coal, while Korea Resources and Japanese firms Itochu and Mitsui will receive the remaining 30% of coal supplies.

According to the agreement, Erdenes will supply 300,000t of coal in the first year and increase its production to 1-1.5Mt in the second year and 15Mt within three to four years.