Feb. 5 – The Mongolian government is rethinking its strategy of allowing foreign investors to bid for major stakes in coal projects as it canceled an auction for its Tavan Tolgoi coal mine.
Prime Minister Sükhbaataryn Batbold prefers the Tavan Tolgoi coal mine to be 100 percent Mongolian-owned rather than selling a 49 percent stake to foreign investors a government spokesperson told Reuters. Possibly, this could be through a mining contract or a production-sharing arrangement that retains full ownership to the state.
The state-owned Tavan Tolgoi mine is a huge, virtually untapped coal deposit with an estimated 6.4 billion tons of reserves. Mongolia is a beautiful rugged country abundant with resources like coal, copper, gold, uranium, and oil. It is has yet to fully recover from being a former Soviet state. The process of developing a full market economy has been tumultuous for its almost three million people.
Investment banks JPMorgan and Deutsche Bank were previously hired by the Mongolian government to advise on the billion dollar coal mine sale. Currently, authorities are in negotiations on how to proceed with the development of the mine.
“There is no decision on what will happen with this mine. Negotiations are still going on,” Purevjav Gansukh, the Mongolian ambassador in Singapore, was quoted by Dow Jones.
