Mongolia's giant coal mine to start production on Dec 1
ULAN BATOR Oct 13 (Reuters) - Mongolia will start producing coal from the eastern block of the giant Tavan Tolgoi coal deposit in the Gobi desert on Dec. 1, the head of one of the companies entrusted with its development told Reuters on Thursday.
"We have all the necessary rights to start production on December 1," said Wolfgang Peters, chairman of Germany's BBM Operta Group, which was awarded the contract to develop the eastern Tsankhi block of Tavan Tolgoi with Australia's Macmahon Holdings in August.
Peters, who was in Mongolia as part of a delegation accompanying German Chancellor Angela Merkel, said output from the block is expected to reach 3 million tonnes in 2012, and eventually rise to 15 million tonnes per year.
Mongolia plans to list the east Tsankhi block, which covers about 40 percent of the total area of the estimated 7.5-billion tonne Tavan Tolgoi deposit, in a multibillion dollar international IPO scheduled for the first half of next year.
But analysts have expressed concern that political uncertainties could still delay the project, with Mongolia's parliament still to approve a politically contentious investment agreement for the western block.
Following complaints from Japanese and South Korean bidders, the government backtracked from a previous deal granting 40 percent of the block to China's Shenhua Energy , 36 percent to a Russian-Mongolian consortium and 24 percent to Peabody of the United States.
Erdenes Tavan Tolgoi, the state-owned company in charge of the deposit, said last month that all the original bidders were still in the running.
Local media reports suggested last week that the Japanese and South Korean bidders would become part of a Peabody-led consortium and be granted a total stake of 33 percent, with Shenhua and the Russian consortium also granted 33 percent.
The Mongolian government is keen to get a deal in place for both the eastern and western blocks of Tavan Tolgoi as soon as possible as it strives to fulfil promises it made to the electorate in 2008.
But a growing number of voices have been calling for the project to be delayed until after next year's parliamentary elections, saying that populist jockeying could harm decision-making.
"We have all the necessary rights to start production on December 1," said Wolfgang Peters, chairman of Germany's BBM Operta Group, which was awarded the contract to develop the eastern Tsankhi block of Tavan Tolgoi with Australia's Macmahon Holdings in August.
Peters, who was in Mongolia as part of a delegation accompanying German Chancellor Angela Merkel, said output from the block is expected to reach 3 million tonnes in 2012, and eventually rise to 15 million tonnes per year.
Mongolia plans to list the east Tsankhi block, which covers about 40 percent of the total area of the estimated 7.5-billion tonne Tavan Tolgoi deposit, in a multibillion dollar international IPO scheduled for the first half of next year.
But analysts have expressed concern that political uncertainties could still delay the project, with Mongolia's parliament still to approve a politically contentious investment agreement for the western block.
Following complaints from Japanese and South Korean bidders, the government backtracked from a previous deal granting 40 percent of the block to China's Shenhua Energy , 36 percent to a Russian-Mongolian consortium and 24 percent to Peabody of the United States.
Erdenes Tavan Tolgoi, the state-owned company in charge of the deposit, said last month that all the original bidders were still in the running.
Local media reports suggested last week that the Japanese and South Korean bidders would become part of a Peabody-led consortium and be granted a total stake of 33 percent, with Shenhua and the Russian consortium also granted 33 percent.
The Mongolian government is keen to get a deal in place for both the eastern and western blocks of Tavan Tolgoi as soon as possible as it strives to fulfil promises it made to the electorate in 2008.
But a growing number of voices have been calling for the project to be delayed until after next year's parliamentary elections, saying that populist jockeying could harm decision-making.
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