Mongolia seeks investors for exporting Tavan Tolgoi coalDate: Aug 02, 2009 It is reported that Mongolian Government is holding a series of detailed and complex talks with officials of several foreign companies interested in investing in Tavan Tolgoi coal project. The Mongolian decision will be announced only after various commercial aspects of their respective proposals are weighed, and geopolitical considerations are reviewed. Every bid will have some plus points and also some which may not appear very attractive. Their intrinsic merit has to be judged, as also their comparative appeal. This is no easy task, and the final decision will not please everybody, inside or outside Mongolia. The prime consideration in that choice would centre on the building of a new railway. Without proper and adequate railway connectivity, the coal in Tavan Tolgoi is just coal in the earth, not a valuable mining asset. Countries like China, Russia, South Korea, and the USA are searching for a clue to how their mind works, and countries farther away, like Brazil and India, are watching with interest. Mongolians are waiting for more than a year now for implementation of the election promises of distributing a part of the income from mining resources among all of them.Mining operations at the Tavan Tolgoi deposit are at present at a preliminary stage of what is to follow and currently a bare 4 million tonnes are mined per year. No railway is really needed to transport this. The MPRP group in Parliament wants at least a beginning to be made in distributing the Motherland Allowance in 2010 and, for that, work on the mines has to start in a big way without much further delay. For that to happen, work on building the railway has to start soon. Mr V Yakunin head of the Russian Railway LLC, in a statement as published in the Russian media last year, said that "We are ready to take on the responsibility of improving the Mongolian railway system. In return for our investment we would like to get a mining licence for the natural resources from the Mongolian Government. We shall transfer the licence to a Russian company with the capacity to develop mineral deposits. We are discussing the establishment of a joint venture in partnership with either the Mongolian Government or a company assigned by them. When we transfer the licence we shall get at least 25% of the profits of any specific project and this will cover our initial expenses on the infrastructure needed to lay the railway." This is just what has been happening, stage by stage. A Russian-Mongolian joint company called Infrastructure Development has been established and the blueprint for a new railway line from Tavan Tolgoi to Zuunbayan in the east is ready. Mr Yakunin's suggested railway will be 920 km long, laid like a ribbon along the vast steppe towards eastern Mongolia. It will join Choibalsan station on the existing track and thence continue along the old railway until the border point of Ereentsav. Its total length will thus be 1,160 km, making it longer than the present trans Mongolian railway that runs from Sukhbaatar to Zamiin Uud. Also, the Mongolian Government once indicated that its short-term goal was to build a railway to the south, which would be the shortest route to reach South Korean and Japanese markets. At the request of the Mongolian Government, World Bank analysts made a detailed study of the cost of transporting coal to the several possible target markets, and compared the merits of railways and roads. Out of the four directions from Tavan Tolgoi, the northern route to Solovyovsk, was the most expensive and the southern one to the Gashuun Sukhait border the most cost efficient. Source: SteelGuru |
China Eurasia Investment Forum 2009
Grand Millennium Hotel Beijing, China. China and Eurasia: Emergence of New Silk Road Investment and networking opportunities for investors, financiers, resources companies and service providers Inaugural China Eurasia Investment Forum aims to bring together the government officials, investors, financiers, resource companies, service... Read more
China and Eurasia Region
