S KOREA BIDDING FOR AT LEAST 10% STAKE IN TAVAN TOLGOI COAL PROJECT -KORES CEO
The South Korean companies involved in a consortium seeking a stake in Mongolia’s massive Tavan Tolgoi coal mine project want at least a 10% stake in the project, as state-run Korea Resources Corp. aims to expand the scope of its investments in overseas assets, the company’s chief executive said Friday.
“South Korea wants a stake that enables [us] to have the right to participate in [project] management,” Kim Shin-jong, president and chief executive of Korea Resources, told reporters.
In negotiations with Mongolia, the Russia-Japan-Korea consortium will also insist that a 36% stake is too small, Kim said.
However, any final decision on the size of the consortium members’ stake is unlikely until after Mongolia’s parliamentary elections in June, Kim said.
The project has been much delayed. Mongolia awarded contracts in July, then canceled them after a row over selection procedures, pitting its huge neighbors–China and Russia–against each other and leaving Japan and South Korea fuming.
Mongolia awarded a 40% share to China’s Shenhua Group, 36% to a previously unreported Russian-Mongolian group and 24% to Peabody Energy Corp. (BTU).
Its decision shocked losing South Korean and Japanese companies involved in the short-listed OAO Russian Railways-Korea-Japan consortium. Seoul and Tokyo cried foul play.
The Korean members of the Russian-Japanese-Korean consortium includes Korea Resources, state utility Korea Electric Power Corp. (015760.SE), steel giant Posco (005490.SE), Daewoo International Corp. (047050.SE) and LG International Corp. (001120.SE).
“South Korea wants a stake that enables [us] to have the right to participate in [project] management,” Kim Shin-jong, president and chief executive of Korea Resources, told reporters.
In negotiations with Mongolia, the Russia-Japan-Korea consortium will also insist that a 36% stake is too small, Kim said.
However, any final decision on the size of the consortium members’ stake is unlikely until after Mongolia’s parliamentary elections in June, Kim said.
The project has been much delayed. Mongolia awarded contracts in July, then canceled them after a row over selection procedures, pitting its huge neighbors–China and Russia–against each other and leaving Japan and South Korea fuming.
Mongolia awarded a 40% share to China’s Shenhua Group, 36% to a previously unreported Russian-Mongolian group and 24% to Peabody Energy Corp. (BTU).
Its decision shocked losing South Korean and Japanese companies involved in the short-listed OAO Russian Railways-Korea-Japan consortium. Seoul and Tokyo cried foul play.
The Korean members of the Russian-Japanese-Korean consortium includes Korea Resources, state utility Korea Electric Power Corp. (015760.SE), steel giant Posco (005490.SE), Daewoo International Corp. (047050.SE) and LG International Corp. (001120.SE).
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