Tavan Tolgoi coking coal mine in Mongolia to change the supply dynamics
IT is a company with its foot on more than 7 billion tonnes of coal, enough to make a dent in even China's enormous appetite. It will have about 3 million shareholders when it goes public, a process that will involve at least four investment banks and up to three separate stock exchanges.
It is Erdenes Tavan Tolgoi, a currently state owned group charged with turning one of the world's largest undeveloped coking coal deposits into the biggest achievement yet from Mongolia's fledgling, but potentially rich, mining industry.
Every chief executive in the global coalmining business, from BHP Billiton's Mr Marius Kloppers and Rio Tinto's Mr Tom Albanese down, will be keeping a tight watching brief on Tavan Tolgoi given its rare capacity to influence coking coal markets.
The project is initially targeting 15 million tonnes of production each year, most of which will be coking coal, with the potential to expand that substantially. To put that number in context, that equates to around a third of China's annual coking coal imports, all of which will come from a deposit just on the other side of the Chinese border in southern Mongolia.
High cost, marginal producers will find themselves out of business if the coking coal market doesn't grow enough to absorb Tavan Tolgoi, while Australia's established miners will find themselves up against a significant new player.
The logistics of turning such a monster resource into a fully fledged mine is hard enough, doing it against a complicated commercial and political backdrop is another thing.
New Zealand born, Australian trained Mr Graeme Hancock is only a month into his job as chief operating officer of Tavan Tolgoi, but he appears to have a thorough understanding of the challenges facing the company and its project. Mr Hancock's employer owns the whole project, but a western portion has been earmarked for development by a consortium of international players all negotiating for the right to dig it up on behalf of Erdenes and the Mongolian government.
(Sourced from theaustralian.com.au)
It is Erdenes Tavan Tolgoi, a currently state owned group charged with turning one of the world's largest undeveloped coking coal deposits into the biggest achievement yet from Mongolia's fledgling, but potentially rich, mining industry.
Every chief executive in the global coalmining business, from BHP Billiton's Mr Marius Kloppers and Rio Tinto's Mr Tom Albanese down, will be keeping a tight watching brief on Tavan Tolgoi given its rare capacity to influence coking coal markets.
The project is initially targeting 15 million tonnes of production each year, most of which will be coking coal, with the potential to expand that substantially. To put that number in context, that equates to around a third of China's annual coking coal imports, all of which will come from a deposit just on the other side of the Chinese border in southern Mongolia.
High cost, marginal producers will find themselves out of business if the coking coal market doesn't grow enough to absorb Tavan Tolgoi, while Australia's established miners will find themselves up against a significant new player.
The logistics of turning such a monster resource into a fully fledged mine is hard enough, doing it against a complicated commercial and political backdrop is another thing.
New Zealand born, Australian trained Mr Graeme Hancock is only a month into his job as chief operating officer of Tavan Tolgoi, but he appears to have a thorough understanding of the challenges facing the company and its project. Mr Hancock's employer owns the whole project, but a western portion has been earmarked for development by a consortium of international players all negotiating for the right to dig it up on behalf of Erdenes and the Mongolian government.
(Sourced from theaustralian.com.au)
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