Russian Railways Heads Japan, Korea Bid For Tavan Tolgoi - Co
February 01 2011 - 9:30AM
Dow Jones News
Russian Railways has formed an international consortium to bid
together to develop the Tavan Tolgoi mine in Mongolia, one of 15
seperate bids for the remote project.
A spokesman at the Russian state-owned company told Dow Jones
Newswires Tuesday that it has teamed up with Russia's largest coal
producer Siberian Coal Energy Co., or SUEK, and a number of Japan
and Korea companies, including Sumitomo Corp. (8053.TO), Marubeni
Corp. (8002.TO), Itochu Corp. (8002.TO) and state-run Korea
Resources Corp. Its bid has already been submitted to the Mongolian
government, he added, but the timeframe for a decision is
unknown.
A person familiar with the matter said that there are 14 other
bids, including individual pitches from Vale SA (VALE), Xstrata PLC
(XTA.LN), ArcelorMittal (MT), Peabody Energy Corp.'s (BTU) and
Russian billionaire Oleg Deripaska's En+ Group Ltd, as well as a
joint bid from Mitsui & Co. (8031.TO) and China's Shenhua
Group, plus a number of individual bids from Indian and Mongolian
companies.
Earlier Tuesday, Vale declined to comment on reports of its
possible interest in the mine project.
The Mongolian government is giving strategic investors a chance
to develop roughly half the deposit, in the western Tsankhi area of
Tavan Tolgoi.
The coal mine is estimated to have about 6.4 billion metric tons
of coal reserves.
Russian Railways, the lead investor for its consortium bid, is
planning to build a rail road, running from the mine to the rail
road, connecting China and Russia via Mongolia.
"The total lack of infrastructure is the main challenge," the
spokesman said.
He added that the consortium plans to build the necessary
infrastructure, develop the mine and sell the coal.
-By Alexander Kolyandr, Dow Jones Newswires; +7 495 232 9192;
Alexander.Kolyandr@dowjones.com
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