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China’s Shenhua and partners bid for Mongolian coal project

World Coal,

Chinese group, Shenhua Energy Co. Ltd will be part of a consortium bidding to develop the giant Mongolian coal project at Tavan Tolgoi.

The Mongolian government recently announced that bidding for Tavan Tolgoi would reopen, years after the results of an original bid and tender were annulled.

Shenhua was previously part of a consortium in 2011 that was awarded the western block of the project. Yet the result was annulled after rival bidders from Japan and South Korea branded the decision unfair.

The company said it had formed a consortium with Energy Resources LLC, a wholly-owned unit of the Mongolian Mining Corp (MMC), and Japan's Sumitomo Corp.

The consortium handed in the bid on 1 Dececmber to the Mongolian government to develop east Tsankhi and west Tsankhi, two blocks of the Tavan Tolgoi project.

Shenhua did not provide any details about the proposed ownership structure, but according to a government resolution issued earlier this year, the winning team needs to be at least 51% controlled by a Mongolian firm with five years or more of domestic mining experience.

Analysts said only two local companies were likely to be able to meet the five-year requirement, including the MMC unit and Tavan Tolgoi JSC, a small Ulan Bator-listed miner.

Edited from various sources by Sam Dodson

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