Erdenes Tavan Tolgoi

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This article is part of the CoalSwarm coverage of Mongolia and coal
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Erdenes Tavan Tolgoi, which is also occasionally referred to as Erdenes TT, is a subsidiary of Erdenes MGL, a Mongolian government owned company to represent the government's interest in mining projects.[1] Erdenes Tavan Tolgoi was formed in September 2010.[2]

An Australian government trade agency reports that Erdenes TT, "a daughter company of the government owned Erdenes MGL" has been formed to control the Tavan Tolgoi coal project. "Erdenes TT will maintain a 50 per cent stake in the project, 10 per cent of the shares will be issued to every citizen of Mongolia, 10 per cent will be listed on the MSE [Mongolian Stock Exchange] and 30 per cent open to foreign investment."[3]

Public offering

In September 2011 it was reported that Mongolia will be selling a stake in its Erdenes Tavan Tolgoi coal-mining company to the public in 2012. The company has been in talks to raise £3billion by offering 30% of its equity overseas. The four investment banks currently selected to lead and arrange the share offering are Deutsche Bank, BNP Paribas, Goldman Sachs and Macquarie Group.[4]

Coal projects

The Tavan Tolgoi mine is estimated to have at least 5 billion tonnes of coal reserves. The Mongolian state company is expected to retain a stake in the mine with a consortium of US, Chinese and Russian companies developing the project in return for a share.[4] The development of the mine has been flagged as needing to tap into the Balgasiin Ulaan Nuur underground water deposit 70 km to the south of the Tavan Tolgoi deposit, and require the construction of the Tavan Tolgoi power station, a 75-100 megawatt power station to support the mine.[5]

Financial Troubles

In early 2013 it was reported that Erdenes Tavan Tolgoi LLC had financial problems and was seeking a loan from the Mongolian government of up to $US500 million to pay debts and fund infrastructure construction. Bloomberg reported that underpinning Erdenes TT's failure to pay Altangovi, which provides warehousing services at the border with China, was the unfavourable July 2011 contract to supply the Chinese aluminium company Chalco. The head of Erdenes TT, Yaichil Batsuuri, told Bloomberg that Erdenes TT supplies coal to Chalco at $53 a metric ton, which is less than the $61 it costs to move it to the Tsagaan Khaad border station. Batsuuri wants the government to amend the contract with Chalco to increase the price and reduce the volumes.[6]

Contact details

Website: http://www.erdenesmgl.mn/ (English language version does not seem to be working)

Articles and resources

References

  1. Erdennes MGL, "Erdennes MGL" LLC, United Nations Economic and Social Commission for Asia and the Pacific, Ulaanbaatar 2009, page 2.
  2. A.Erdenepurev, Director of Fuel Policy Department, Ministry of Mineral Resources and Energy, Mongolia, Brief Update on Tavan Tolgoi Coal Project, Mongolia", Presentation to the Government Business Dialogue-3 Moscow, Russian Federation, November 23, 2010. (Pdf)
  3. Australian Trade Commission, "Mongolian Mining Projects Report 2011", January 2011, page 15. (This report is not available online).
  4. 4.0 4.1 "Coal occupying the London Stock Exchange", WWF, 2012 Report.
  5. "Mongolia’s prime minister says development of giant copper-gold mine, coal mine on track" Associated Press, June 14, 2011.
  6. Michael Kohn, "Mongolia’s Erdenes TT Halts Coal Exports to Biggest Buyer China", Bloomberg, January 17, 2013.

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