Friday, November 25, 2011


Although Mongolia still plans to list its Tavan Tolgoi coal mine in Hong Kong, London, and the Ulaanbaatar, it is still too early to say exactly when, said the newly appointed chief financial officer for the project, Angus Caithness.

Prior to joining Erdenes Tavan Tolgoi, Caithness was chief financial officer to Hunnu Coal, which was bought this month for USD 493 million by Thailand's top coal miner, Banpu.

“Obviously with this (listing), there are a number of legal and technical issues to be overcome,” Caithness said. Ch. Khurelbaatar, chief of the Cabinet office and member of a government working group on Tavan Tolgoi, said that Mongolia plans to raise USD 3 billion from the triple listing. Senior politicians have said the eastern section of the Tavan Tolgoi project would be ready for its stock exchange debut at the end of the first quarter of 2012, but critics have cast doubt on the timetable.

Before the initial public offering (IPO) can go ahead, Mongolia’s Parliament first needs to reach a decision on an investment agreement for the western block of the project, but the deal remains contentious, especially ahead of elections next year. Bidders from Japan and South Korea complained the selection process was unfair after the government excluded them from the project. In July the government announced 40 percent of the project to China’s Shenhua, 24 percent to the United States’ Peabody Energy, and 36 percent shared within a Mongolian-Russian consortium led by Russian Railways, but that decision is now being revised.

Mongolia has been keen to bring international expertise to Tavan Tolgoi. The coal deposit has estimated reserves of 7.5 billion tons of coal, including the world’s largest untapped deposit of coking coal used to make steel. It has already shortlisted BNP Paribas, Deutsche Bank, Goldman Sachs, and Macquarie to handle the listing.

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Source : Business Council of Mongolia

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