ID :
111874
Tue, 03/16/2010 - 18:22
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Shortlink :
http://m.oananews.org//node/111874
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CHINA SHENHUA STILL PURSUING MONGOLIAN COAL PROJECT
Ulaanbaatar, /MONTSAME/ China Shenhua Energy Co Ltd said it is still in the running for a stake in Mongolia's massive Tavan Tolgoi project, adding a new twist in the long-running tussle for what has been billed the world's largest untapped coking coal resource, according to the Reuters.
Shenhua's President Ling Wen's comments on Tuesday came after Mongolia said it had cancelled the sale of the estimated $2 billion stake in the Tavan Tolgoi project. "This year, the companies were asked by the government to submit their bids for a second time," Ling said, adding there are 10 companies in the race for the project. "I believe we have the greatest competitive advantage over the others," he said at the sidelines of a media briefing.
Mongolian Prime Minister Sukhbaatariin Batbold said in an interview with Reuters in early February that the government's decision not to auction a 49-percent stake in the Tavan Tolgoi project would allow the nation a greater return on the deposit, which holds estimated reserves of 6.5 billion tonnes of coking coal.
"I've never heard of it," Ling told Reuters at the sidelines of a media briefing, when told about the report, adding that he had just met Mongolia's prime minister.
According to the Reuters, shares in Shenhua, China's top coal miner and the world's most valuable coal producer, fell to their lowest levels in more than two weeks and lost 1.5 percent by midday. Other shortlisted bidders for the stake in Tavan Tolgoi included heavyweights BHP Billiton, India's Jindal, Brazil's Vale and U.S. coal miner Peabody.
Ling said Shenhua has been interested in the project since 2003, but declined to comment on a timetable for the stake sale.
Sources told Reuters in early February that Mongolia's government had decided to keep 100 percent of the huge coal deposit, a sign of the government's determination to fully control one of the landlocked country's most valuable natural resources. [ID:nSGE61400Z]
For investors, the move was a flashback to earlier in the decade when Mongolia slapped a windfall tax on mine profits and sought large stakes in a number of big projects to defuse public disquiet over earlier generous concessions to foreign firms.
The country has long frustrated the global resources industry by dragging its feet on investment decisions. The government, hobbled by indecision and bureaucratic infighting, took years to conclude an agreement to develop its largest copper-gold property at Oyu Tolgoi, with Ivanhoe Mines and Rio Tinto.
The Oyu Tolgoi deal, in which Mongolia will retain a 34 percent interest, was seen at the time as a precedent for future deals such as Tavan Tolgoi. Coking coal, used in steelmaking, is in great demand in Mongolia's neighbour China, which has the world's biggest steel industry.
S.Batbayar
Shenhua's President Ling Wen's comments on Tuesday came after Mongolia said it had cancelled the sale of the estimated $2 billion stake in the Tavan Tolgoi project. "This year, the companies were asked by the government to submit their bids for a second time," Ling said, adding there are 10 companies in the race for the project. "I believe we have the greatest competitive advantage over the others," he said at the sidelines of a media briefing.
Mongolian Prime Minister Sukhbaatariin Batbold said in an interview with Reuters in early February that the government's decision not to auction a 49-percent stake in the Tavan Tolgoi project would allow the nation a greater return on the deposit, which holds estimated reserves of 6.5 billion tonnes of coking coal.
"I've never heard of it," Ling told Reuters at the sidelines of a media briefing, when told about the report, adding that he had just met Mongolia's prime minister.
According to the Reuters, shares in Shenhua, China's top coal miner and the world's most valuable coal producer, fell to their lowest levels in more than two weeks and lost 1.5 percent by midday. Other shortlisted bidders for the stake in Tavan Tolgoi included heavyweights BHP Billiton, India's Jindal, Brazil's Vale and U.S. coal miner Peabody.
Ling said Shenhua has been interested in the project since 2003, but declined to comment on a timetable for the stake sale.
Sources told Reuters in early February that Mongolia's government had decided to keep 100 percent of the huge coal deposit, a sign of the government's determination to fully control one of the landlocked country's most valuable natural resources. [ID:nSGE61400Z]
For investors, the move was a flashback to earlier in the decade when Mongolia slapped a windfall tax on mine profits and sought large stakes in a number of big projects to defuse public disquiet over earlier generous concessions to foreign firms.
The country has long frustrated the global resources industry by dragging its feet on investment decisions. The government, hobbled by indecision and bureaucratic infighting, took years to conclude an agreement to develop its largest copper-gold property at Oyu Tolgoi, with Ivanhoe Mines and Rio Tinto.
The Oyu Tolgoi deal, in which Mongolia will retain a 34 percent interest, was seen at the time as a precedent for future deals such as Tavan Tolgoi. Coking coal, used in steelmaking, is in great demand in Mongolia's neighbour China, which has the world's biggest steel industry.
S.Batbayar
