Thursday, July 8, 2010

[cpsnewswire] (Bloomberg) Mongolia Plans to Offer 30% Tavan Tolgoi Company

Mongolia Plans to Offer 30% Tavan Tolgoi Company 

July 8 (Bloomberg) -- Mongolia plans to sell 30 percent of a company controlling the Tavan Tolgoi coking coal deposit in share sales to help fund $1.5 billion of initial development cost, the mining minister said.

The share offerings may take place overseas or in Mongolia and a government-owned company will retain a 40 percent stake, Minister for Minerals and Energy Dashdorj Zorigt said in a telephone interview, after a parliamentary vote yesterday. The rest will be offered to local businesses and the public, he said, without giving details.

“Finally there is clarity in terms of the government policy and the way to move forward,” said Alisher Ali Djumanov, chief executive officer of Eurasia Capital Management, based in Beijing. “We would be a buyer considering the strong long-term potential of this company and the coal sector in Mongolia.”

About 20 percent of the share capital of the company will be offered to Mongolian businesses and 10 percent to the public, Zorigt said. No timetable has been set for the share sales overseas or a preference made for where they should be held, he said.

Overseas Companies

The government is still negotiating with overseas mining companies over whether they will help develop Tavan Tolgoi on a contract basis, said Zorigt. The government will report back to parliament on the issue later this year, he said.

Among the companies that have publicly said they are interested in developing Tavan Tolgoi is China Shenhua Energy Co., the biggest Chinese coal producer.

BHP Billition Ltd., Mitsui & Co., Xstrata Plc, OAO Russian Railways and Sojitz Corp. are also among the companies with which the government has been negotiating this year on Tavan Tolgoi rights, Zorigt said in a Dec. 3 interview.

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"Mogi" Munkhdul Badral

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