Mongolia, the resource-rich Asian nation that shares a border with China, is close to selecting an operator for the Tavan Tolgoi coal project with the government expected to finalize talks with bidders and select a winning bid by the end of this month, though that time frame could be stretched a bit.
A person familiar with the situation said that the talks with the bidders have become complex due to issues over infrastructure facilities, the Wall Street Journal reported. The Tavan Tolgoi mine is the world's largest untapped coking coal deposit. Mongolia could become the world's largest coking coal producer this year.
Arcelor Mittal (MT), the world's largest steel producer, Brazil's Vale (VALE), the world's largest iron ore producer, and Missouri-based Peabody Energy (BTU), the largest U.S. coal producer, are among the parties believed to be interested in submitting bids for Tavan Tolgoi.
The massive Tavan Tolgoi project has an estimated six billion metric tons of reserves of coking coal, an essential ingredient for making steel, the Journal reported. The projects Tsankhi block has 1.2 billion tons of coal reserves and could produce 15 million tons annually for more than 30 years.