Mongolia Mining targeting new coal and iron ore assets

Mongolia Mining Corp. is looking out for acquisition targets in the Mongolian resources sector following an initial public offering in Hong Kong raising USD650 million, according to its top executive. Executive Chairman J. Odjargal said the company "will focus more on coal and iron ore" in identifying potential targets. "A major criterion will be proximity to the Mongolian-Chinese border," he said.

Mongolia Mining is the first Mongolian company to list its shares in Hong Kong, though several other companies doing business with Mongolia have already raised funds on the exchange.

Mongolia"s ability to deliver goods to China is hampered by poor transportation links. . Odjargal said that there are plans for two new rail lines already approved by Mongolia"s parliament, including a direct link from the company"s Ukhaa Khudag deposit in the southern Gobi desert to the Chinese border that would cut its transport costs in half. Currently, all of the company"s coal is delivered to the border by truck.

"The railway will help increase our margins significantly," he said. However, the timing of construction for the two projects won"t be known until the first quarter of 2011, he said.