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Mining giants dig in for Mongolian battle
Bill Condie17 Feb 2009
Miners BHP Billiton, Xstrata, Rio Tinto and Brazil's Vale are bidding to develop Mongolia's prized $2 billion (£1.4 billion) Tavan Tolgoi coal mine, government insiders say.
Mongolia's government hired Deutsche Bank and JPMorgan to sell up to 49% of the world's biggest untapped coking-coal deposit.
Tavan Tolgoi has a coal reserve of 6.5 billion tonnes, and is also drawing bids from consortiums of Japanese, Russian and Korean firms.
China Shenhua Energy, long seen as the front-runner, may now have lost its favoured status in the project.
"There's a pretty strong pitch that they shouldn't be selling to the Chinese," said a Hong Kong-based investment banker.
Debt-laden Rio Tinto, which last week struck a $20 billion investment deal with China's state-owned aluminium producer Chinalco, already has a joint project in Mongolia with Canada's Ivanhoe Mines - the Oyu Tolgoi copper and gold deposit.
The sale process has been plagued by setbacks as Mongolia clarifies its mining laws.
