Mongolia’s state-owned mining company Erdenes Tavan Tolgoi (Erdenes TT) is planning to commence mining at Mongolia’s West Tsankhi coal area, a move which will help the company boost its output in order to reduce its debt load.
Erdenes TT chief executive officer Yaichil Batsuuri told Bloomberg that the company will select a contractor by the end of this month in order to begin work at West Tsankhi, which is part of the Tavan Tolgoi coal basin.
Tavan Tolgoi is the world’s largest untapped coking and thermal coal deposit with an estimated resource of 6.4 billion tonnes.
The move marks a turn-around in Mongolia’s decision to select Shenhua of China, Peabody Energy of the US and Russian Railways, among others, to develop the West Tsankhi coal area two years ago.
Japanese and South Korean companies had also expressed interests in developing the site.
Erdenes TT also plans to mine up to five million tonnes at its East Tsankhi area this year, Bloomberg reported, citing Batsuuri.
By ramping up its output at Tavan Tolgoi, the company is seeking to repay $186m to Aluminum Corporation of China Limited (chalco) with deliveries of the fuel.
In 2013, Erdenes TT halted its coal shipments to Chalco for three months over a price dispute but resumed deliveries in April 2013.
The mining company also has to repay nearly $200m to the Development Bank of Mongolia.
Image: Tavan Tolgoi is the world’s largest untapped coking and thermal coal deposit with an estimated resource of 6.4 billion tonnes. Photo: Brücke-Osteuropa.