Mongolian PM says plans to list national rail company

(Reuters) - The long awaited initial public offering of Mongolia's Erdenes-Tavan Tolgoi will be delayed to the end of the first quarter of 2012 at the earliest, Mongolian Prime Minister Sukhbaatar Batbold said on Friday, adding that his government was also planning to list part of the country's state-owned rail firm.

Batbold, speaking to Reuters in an exclusive interview, said discussions were still ongoing with all firms bidding for mining rights for the western section of the massive Tavan Tolgoi coal deposit.

"The final investment agreement will take into consideration the interests of our two neighbours (China and Russia)," Batbold said.

The government has previously said the listing would take place by the end of 2011 or early 2012.

Batbold also said the government plans to list 49 percent of Mongolian Railway Co to help fund the country's ambitious construction plans.

Land-locked Mongolia, which has one of the lowest railway densities in the world, plans to more than triple its rail network to reach Chinese and Russian borders, tapping their ports to build new trade ties with countries such as Japan and South Korea.

The government plans to build additional rail lines to link the Tavan Tolgoi deposit to the Chinese border, on top of approved plans to construct an east-west line that would travel through Mongolia's Sainshand to near the Russian border town of Choibalsan.

Tavan Tolgoi is the world's largest untapped coking coal deposit with an estimated 6 billion tonnes of coal resources. The western section of the mine is being auctioned to international investors, while the government would retain ownership of the eastern block and raise money for its development via an IPO.

With no resources of their own, Japan and South Korea are desperate to get a slice of Tavan Tolgoi and a string of their trading firms have partnered with Russian Railways to form a consortium bidding for the project.

Goldman Sachs Group Inc (GS.N), Deutsche Bank AG (DBKGn.DE), BNP Paribas SA (BNPP.PA) and Macquarie Group Ltd (MQG.AX) were hired to manage the offering of Tavan Tolgoi.

(Writing by Fayen Wong; Editing by Jacqueline Wong)

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