RZD-led consortium among prelim winners for Tavan-Tolgoi coal rights
MOSCOW. July 4 (Interfax) - A consortium led by Russian Railways (RZD) is among the preliminary winners of a tender for the rights to the Tavan Tolgoi coal deposit in Mongolia, The New York Times said.
The three preliminary winners, who are now subject to approval by Mongolia's parliament, also include Peabody Energy Corp and a consortium of China's Shenhua and Japan's Mitsui & Co.
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.
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.