Mongolia in the spotlight

EVERY one seems to want a piece of the Mongolian coal action these days. And it is not just the Chinese market – big as it is – that beckons. There is also the growing prospect of railing coal through Russia to shipping on the Pacific coast.

Just two weeks ago Thai coal giant Banpu injected $45 million into Hunnu Coal as a means of getting a foothold in Mongolia. The move was described as a low-risk way for Banpu to familiarise itself with the Mongolian coal industry.

Today Aspire Mining reported that commodity trading house Noble Group had acquired a further 18m shares, giving it an undiluted 8.6 per cent stake in Aspire. The Australian junior has its wholly-owned Ovoot coking coal project in northern Mongolia which has a maiden resource of 330m tonnes

It was just six weeks ago that Noble formed a strategic alliance with another of our Mongolian coal hopefuls, Xanadu Mines. The deal did not affect Xanadu’s Galshar and Khar Tarvaga thermal coal projects, but opened the way for the new partners to find other energy and mineral projects in the landlocked northern Asia country.

And Fortescue Metals Group had an attempt to get a foothold in Mongolia with its unsuccessful bid to be short-listed for the Tavan Tolgoi project, the world’s largest known untapped coking coal deposit. The successful companies for the short list included Vale, Xstrata, AOA Russian Railways, Shenhua Group, ArcelorMittal and Peabody Energy.

brombyr@theaustralian.com.au

The writer implies no investment recommendation and this report contains material that is speculative in nature. Investors should seek professional investment advice. The writer does not own shares in any company mentioned.

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