Erdenes to commence West Tsankhi coal mine in Mongolia

Mongolian state run coal miner Erdenes Tavan Tolgoi is seeking a contractor to commence operations at its West Tsankhi coal mine located within Tavan Tolgoi basin in 2013.

The developments are said to be in line with company's plan to repay the debt it owes to Aluminum Corporation of China and Development Bank of Mongolia.

Mr Yaichil Batsuuri, Erdenes Tavan Tolgoi CEO, said that the company would select the contractor in next few months and it has set a target of producing 2.6 million metric tonne for 2013.

Mr Batsuuri said that the move was made to increase its production and to surmount its financial fiasco. The company owes USD 186 million of fuel delivery to Aluminum Corporation of China and an additional USD 200 million to Development Bank of Mongolia.

He said that besides, the company is planning to raise the coal production at East Tsankhi deposit to 5 million tonne, compared to 2.5 million tonne in 2012.

The company is also mulling over forging a JV with overseas miners such as Peabody, Anglo-American and Shenhua citing the inexperience of not producing more than 10 million tonne per annum.

Source – Bloomberg

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