Mongolia grants 1 year contract to mine Tavan Tolgoi west coal block

Mongolia grants 1 year contract to mine Tavan Tolgoi west coal block: "Reuters reported that  Mongolia has lined up three local firms to mine the West Tsankhi block of the giant Tavan Tolgoi coal mine for a year.

Mr Delgersaikhan Tsagaan-Uvgun, head of mine planning and technical coordination of state owned Erdenes Tavan Tolgoi, said the company has finalized a one year contract for mining at the 888 million tonne West Tsankhi block to a consortium of three local companies."

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Mongolia grants 1-year contract to mine Tavan Tolgoi west block | Reuters

Mongolia grants 1-year contract to mine Tavan Tolgoi west block | Reuters: "Mongolia has lined up three local firms to mine the West Tsankhi block of the giant Tavan Tolgoi coal mine for a year, an executive at the state-owned mining company said on Friday, as the country aims to boost coal output.

Mongolia is racing to start producing coal from the long-delayed project as it is under pressure to plug a budget gap and help pay down debt to Aluminium Corp of China (Chalco) amid a sharp downturn in coal prices."

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Problems increase in Mongolia's Tavan Tolgoi coal mine - UPI.com

Problems increase in Mongolia's Tavan Tolgoi coal mine - UPI.com: "ULAN BATOR, Mongolia, Jan. 29 (UPI) -- Mongolia's massive state-owned coal mine, the Tavan Tolgoi, is facing increasing problems.

Last week, Erdenes-Tavan Tolgoi, the state-owned mining company that owns the Tavan Tolgoi project, said it had stopped coal exports to China and threatened to cancel its coal-for-loan deal with Chinese resource company Aluminum Corp. of China, or Chalco.

The Tavan Tolgoi deposit, about 125 miles from the Chinese-Mongolian border, has a total estimated resource of 6.4 billion tons, one-quarter of which is high-quality coking coal."

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Mongolia’s Biggest Coal Miner Loses Executives in Cost Cutting - Bloomberg

Mongolia’s Biggest Coal Miner Loses Executives in Cost Cutting - Bloomberg: "Chief Financial Officer Angus Caithness and Chief Operating Officer Graeme Hancock have left, Erdenes TT spokeswoman Gurjav Enkhmanduul said today in an e-mailed statement. Caithness and Hancock are two of four deputy directors at the company, she said."

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Chalco threatens legal action if Mongolia backs out of coal contract - Globaltimes.cn

Chalco threatens legal action if Mongolia backs out of coal contract - Globaltimes.cn: "Mongolia's Erdenes-Tavan Tolgoi (E-TT), which runs the coveted 7.5 billion-ton Tavan Tolgoi coal project, said last week that it is seeking to renegotiate a 2011 deal with Chalco to supply $250 million worth of coal from the deposit.

Speaking at a press conference, Li Dongguang, president of China Aluminum International Trading Co, a subsidiary overseeing the Mongolian deal, said the company would seek compensation for any breach of the contract.

Li said Chalco imported 2.37 million tons of coal from Tavan Tolgoi in 2012, lower than the original plan of 3-4 million tons."

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Mongolia’s Erdenes COO Hancock Said to Resign on Cash Crunch - Bloomberg

Mongolia’s Erdenes COO Hancock Said to Resign on Cash Crunch - Bloomberg: "The board of the state-run company accepted Hancock’s resignation this week, the person said, declining to be named before the matter is announced publicly. Hancock was the second- highest executive at Erdenes TT, as the miner is also known, and his role included preparing the company to list in Hong Kong, London and on a domestic bourse, the person said.
Enlarge image
Graeme Hancock, chief operating officer of Erdenes Tavan Tolgoi LLC, is seen in this Oct. 30, 2012 photo. Hancock was the second-highest executive at Erdenes TT and his role included preparing the company to list in Hong Kong, London and on a domestic bourse. Photographer: Jerome Favre/Bloomberg
The departure throws into question the timing of what was slated three years ago as a $3 billion initial public offering. At that size, the money raised would be equivalent to about 30 percent of Mongolia’s gross domestic product."

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Mongolia Taps Shenhua to Break China Coal Impasse - Energy TribuneEnergy Tribune

Mongolia Taps Shenhua to Break China Coal Impasse - Energy TribuneEnergy Tribune: "A new management team at Tavan Tolgoi, appointed last fall by the freshly elected Mongolian government, has repaid nearly two-thirds of the $350 million loan but now wants to redraw the contract to reflect fluctuating market prices for coal, he said. Coking coal import prices have since reached around $190/ton, according to the 52Steel.com consultancy.
The impasse had led in part to Tavan Tolgoi being unable to continue to pay for the logistical operations of transporting and exporting the coal to China, he said.
Mongolia is now tapping Shenhua, which is in the running as a candidate to develop part of Tavan Tolgoi, to try to resolve the dispute."

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Mongolia Loan May Help Tavan Tolgoi Exit Chalco Deal, CEO Says - Bloomberg

Mongolia Loan May Help Tavan Tolgoi Exit Chalco Deal, CEO Says - Bloomberg: "Erdenes Tavan Tolgoi may use the funds to pay the $180 million it owes Aluminum Corp. of China Ltd. as part of a supply contract signed in 2011 for steelmaking coal, Batsuuri said today in an interview in Ulan Bator. The $250 million that Chalco, as the Chinese company is known, gave the Mongolian miner as a prepayment can be repaid with coal or cash, he said.
Erdenes TT, as the state-owned company is known, halted deliveries to Chalco on Jan. 11 after it failed to pay a company that provides logistical support amid a cash crunch. The coal supplier is also seeking revisions to the contract signed with Chalco (2600), it’s biggest customer, because prices were set at a level that’s now below the cost of extracting and delivering the coal, Batsuuri said."

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Mongolia taps Shenhua to break China coal impasse - MarketWatch

Mongolia taps Shenhua to break China coal impasse - MarketWatch: "BEIJING--Mongolia is reaching out to China's largest coal producer China Shenhua Energy [1088.HK] in an effort to break a deadlock over the terms of a souring coal supply deal with another Chinese giant, Aluminum Corp. of China [ACH], Mongolia's ambassador to Beijing said Friday.

The growing squabble with China, its largest trading partner, underscores how swiftly changing political and public sentiment in Mongolia toward foreign investment in the country's fledgling mining sector could throw into disarray the development of its Tavan Tolgoi deposit, potentially the world's largest untapped coal reserve."

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Mongolia's Tavan Tolgoi says no IPO in 2013

Mongolia's Tavan Tolgoi says no IPO in 2013: "ULAN BATOR - Mongolia's giant Tavan Tolgoi coal project is facing financial difficulties and an initial public offering for the mine originally scheduled for this year will not go ahead, the chief executive of the development said on Thursday.

"E-TT (Erdenes Tavan Tolgoi) is facing ... financial difficulties. That's why we stopped our coal transportation and export," Batsuur Yaichil, the head of Erdenes Tavan Tolgoi, the state-owned firm in charge of the project, told Reuters.

He said the government was going to provide assistance to help the company pay its debts."

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Mongolia stops coking coal exports to China in pricing scrap | MINING.com

Mongolia stops coking coal exports to China in pricing scrap | MINING.com: "Mysteel reports Ya Batsuuri, CEO of Mongolian coking coal miner Tavan Tolgoi, said last week the state-owned company had suspended all coal exports to China starting on January 11.

The bulk of China's coking coal imports from Mongolia are from Tavan Tolgoi – mined since the 60s – in the South Gobi desert which is the world’s largest high-quality coking coal used in steelmaking."

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Mongolia: Fast growing economy, evolving investment climate

Mongolia: Fast growing economy, evolving investment climate: "There are two world class mines that hold the key to economic success in Mongolia, namely Tavan Tolgoi, one of the world's largest coking coal deposits, and Oyu Tolgoi, the largest underdeveloped copper/gold project. The IMF estimated that export proceeds from these two mines could total US$2 billion in 2013, rising to US$7 billion by 2020, while Mongolia’s GDP in 2011 was only $8.8 billion.

With the expected $3 billion Tavan Tolgoi IPO this year and commercial production of Oyu Tolgoi to commence in first half 2013, it appears the Mongolia economy is poised to maintain good momentum. Mongolia’s average real GDP growth is projected to be 13.4% annually over the coming 5 years due to mining initiatives, according to IMF’s World Economic Outlook 2012."

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Mongolia’s Tavan Tolgoi Seeking State Loan, CEO Says - Bloomberg

Mongolia’s Tavan Tolgoi Seeking State Loan, CEO Says - Bloomberg: "Erdenes Tavan Tolgoi, which signed a $250 million contract in July 2011 to supply coal to companies including Aluminum Corp. of China Ltd., gave about 300 billion tugrik ($214 million) to the government’s Human Development Fund in 2011 and 2012, the UB Post newspaper reported in September, citing the company’s then chief executive Baasangombo Enebish. The fund hands out cash to Mongolian citizens as part of a government effort to redistribute the nation’s mining wealth."

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Mongolia Minerals Law Threatens Coal Project, Group Says

Mongolia Minerals Law Threatens Coal Project, Group Says: "Proposed changes to Mongolia’s mining laws threaten the viability of the nation’s biggest coal project at Tavan Tolgoi and will further deter foreign investment, the Business Council of Mongolia said.
The legislation, which will give the state the right to a free stake in many mineral projects, will take the country away from the free-market principles practiced there since the early 1990s, Mongolia’s largest business group said in a four-page letter sent to President Tsakhia Elbegdorj’s office on Jan. 7.
The letter, made public by e-mail yesterday, came after the draft laws were published last month. Enlarge image  A worker stands by the arm of a digger in a coal mine in Mongolia. Mineral product exports account for more than 90 percent of the country’s exports. Photographer: Doug Kanter/Bloomberg Overseas investment in Mongolia, which relies on minerals for more than 90 percent of its exports, has cooled since a law last year restricted state owned companies from controlling strategic assets. "

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Mongolian mine to affect water supply?

Mongolian mine to affect water supply?: "Oyu Tolgoi was 94 percent complete in July and is slated for commercial production in the first half of 2013. The Mongolian government holds a 34 percent stake in the project, expected to account for about 30 percent of Mongolia's annual economic output.
The mine, in the South Gobi desert region, holds an estimated 41 billion pounds of copper and 21 million ounces of gold, The New York Times reports.
The region covers an area of 135 square miles and is home to 3.8 million livestock, including camels, horses, cows, sheep and goats, which require some 31,600 cubic meters of water each day.
That compares with the water needs of an estimated 10,000 cubic meters per day for residents in the sparsely populated region.
Extracting copper from the mine, however, is a water-intensive process.
A World Bank assessment indicated that in 2010, Oyu Tolgoi used about 67,000 cubic meters of water a day and the government-owned Tavan Tolgoi coal mine consumed 76,000 cubic meters daily."

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Mongolia’s Tavan Tolgoi Coal Field Deadline Delayed to Mid-2013 - Bloomberg

Mongolia’s Tavan Tolgoi Coal Field Deadline Delayed to Mid-2013 - Bloomberg: "Mongolia may delay the selection of companies to develop part of the nation’s biggest coal field to the middle of 2013 from the end of this year, a government mining official said.
Bidders for the West Tsankhi area of the Tavan Tolgoi deposit “have proposed very attractive offers and the government will discuss with each of them in detail and decide which offer has higher value,” Nemekhbayar Enkhbayar, head of the economy, finance and investment division in the Ministry of Mines, said in an interview in Hong Kong today. “We have to take the geographical situation into account and Chinese companies have big advantages on this.”
Companies such as Peabody Energy Corp. (BTU), China’s Shenhua Group Corp. and Japan’s Mitsui & Co. (8031) have expressed an interest in developing the field. Mongolian President Tsakhia Elbegdorj set an end-of-year deadline for picking the successful bidders in July."

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Mongolia shale-gas development on 'slow track' - MarketWatch

Mongolia shale-gas development on 'slow track' - MarketWatch: "BEIJING--The development of the shale gas industry in resource-rich Mongolia has been hampered by the lack of a clear regulatory jurisdiction over the sector, a Ulan Bator-based senior attorney with global law firm Hogan Lovells said Friday.

Mongolia has seen a recent mining boom led by coal, gold and copper, but shale gas--a natural gas trapped in a type of rock called shale--has yet to fully emerge as a viable investment, although deposits have been identified in the landlocked country.

Apart from the global economic slowdown that has weighed on mining commodities, the lack of policy attention to the sector in Ulan Bator has left shale gas development on the "slow track," Michael Aldrich, a Hogan Lovells partner who previously advised corporate clients on the country's landmark Tavan Tolgoi coal project, told Dow Jones Newswires."

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Erdenes-Tavan Tolgoi Says IPO Unlikely Before 3Q | Fox Business

Erdenes-Tavan Tolgoi Says IPO Unlikely Before 3Q | Fox Business: "Mongolia-based Erdenes-Tavan Tolgoi Co. said Tuesday the company's planned $3 billion Hong Kong, London and Ulan Bator initial public offering is unlikely to be held before the end of the third quarter because of poor market conditions and weak coal prices.
Another reason for the delay in listing the company's shares is that a new Mongolian securities law needed to establish the necessary legal framework for the company to list in the three cities still hadn't been approved, said Graeme Hancock, chief operating officer of the state-owned company that controls what may be the world's largest undeveloped coking-coal reserves."

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Mongolia eyes Peabody Energy to develop giant coalmine

Mongolia eyes Peabody Energy to develop giant coalmine: "Reuters reported that Mongolia state owned developer of the huge but remote Tavan Tolgoi coal deposit in Mongolia has invited US miner Peabody Energy to help build infrastructure at the project ahead of a much delayed bidding process.

State owned miner Erdenes Tavan Tolgoi Ltd which holds the licences for the coal-rich Tavan Tolgoi area in the South Gobi desert, has asked the US firm to draw up logistic and infrastructure plans for the project's western Tsankhi block."

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Mongolia eyes U.S. Peabody to develop giant coalmine | Reuters

Mongolia eyes U.S. Peabody to develop giant coalmine | Reuters: "ULAN BATOR, Oct 16 (Reuters) - The state-owned developer of the huge but remote Tavan Tolgoi coal deposit in Mongolia has invited U.S. miner Peabody Energy to help build infrastructure at the project ahead of a much-delayed bidding process, a senior company official said.

State-owned miner Erdenes Tavan Tolgoi Ltd (ETT), which holds the licences for the coal-rich Tavan Tolgoi area in the South Gobi desert, has asked the U.S. firm to draw up logistic and infrastructure plans for the project's western Tsankhi block, its chief operating officer Graeme Hancock told Reuters on Friday."

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