RZD-led consortium to get 36% of Mongolian coal project
MOSCOW. July 5 (Interfax) - A consortium led by Russian Railways (RZD) will have a 36% stake in the project to develop the giant Tavan Tolgoi coal deposit in Mongolia, the Mongolian government said on its website.
An alliance led by China Shenhua Energy will get 40% and U.S. firm Peabody Energy will have 24%.
RZD declined to comment, saying it expected to receive an approved document from the government.
The issue will be referred to the parliament on Wednesday.
The three consortia are preliminary winners of a tender for the rights to the coal field. It is thought the three groups will jointly develop the western section of the Tavan Tolgoi field, estimated to contain 5 billion tonnes of coal. Estimated project costs are $7.3 billion. Vale SA and Xstrata had also been short-listed.
RZD chief Vladimir Yakunin told reporters he could not see how relations between the tender winners would be built. "It's so far hard to imagine how a swan, pike and crab will be able to haul this cart," he said.
Tavan Tolgoi is in southern Mongolia, 250 km from the Chinese border and 540 km from Ulan Bator. It is estimated to contain 6.5 billion tonnes of high-calorific coal - 40% of it coking coal. The field went partially on stream back in 1967. A 400-km railway and power plants will have to be built for it to be developed full-scale.
Mongolia has split the field up into two zones: one for a group of international mining companies, and the other for Mongolia's Erdenes Tavan Tolgoi, in which the government will own 50% and the other 50% will be distributed among Mongolian investors and private individuals. An initial public offering of Erdenes Tavan Tolgoi shares is planned for the second half of 2011.