Tuesday, December 11, 2007

Mongolia weighs take-over of Tavan Tolgoi deposit

Mongolia’s new government is considering rejecting all bids for the massive Tavan Tolgoi coal mine and allowing the government to operate the site.

Tavan Tolgoi is the second largest mining investment in Mongolia, following the Oyu Tolgoi copper mine. Initial estimates have indicated Tavan Tolgoi will produce 30 million tons of coal annually for the next 30 years.

Newly elected Mongolian Prime Minister Sanj Bayar has proposed new laws to allow the government to take control of the Tavan Tolgoi deposit, N. Algaa, the executive director of the Mongolian National Mining Association, has told Bloomberg News.

Additionally, the government has begun discussions with the site’s current developer, Energy Resources of Mongolia, regarding moves by the government.

"The new prime minister, Bayar, has made a proposal to Energy Resources," Algaa said Thursday.

"His proposal is that the government takes 100 percent ownership of Tavan Tolgoi, but it will be done through negotiations."

Mongolia’s take-over, if enacted, would sideline BHP Billiton, Peabody Energy and China Shenhua Energy which had sought to operate the Tavan Tolgoi site.

Tuesday, 11 December 2007

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