Cash-strapped Mongolia puts giant coalmine back in play

Fri Sep 9, 2016 5:13am EDT
 
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* Estimated coking coal reserves of 7.5 bln tonnes

* $4 billion cost of development equivalent to third of GDP

* Nationalist sentiment blocked previous development bids

* Mining generated 67.8 pct of Mongolia's H1 industrial output

By Terrence Edwards

ULAANBAATAR, Sept 9 (Reuters) - The long-delayed development of Mongolia's giant coal deposit at Tavan Tolgoi in the south Gobi desert is set to be revived as the North Asian country's new government looks for ways to stimulate its crisis-hit economy.

Recent attempts to develop the mine were stymied by nationalists in parliament worried about the involvement of foreign firms, but a financial crisis and a change of government in June have brought it back onto the agenda.

Slowing demand for coal and copper, Mongolia's chief exports, and a plunge in foreign investment have left the world's most sparsely populated sovereign country with soaring debts and a rapidly declining currency, forcing government to hike interest rates and slash spending.

Executives at Erdenes Tavan Tolgoi (ETT), the state firm in charge of the project, say they are now actively evaluating bids to revive the coal mine, one of the world's most promising, with estimated coking coal reserves of 7.5 billion tonnes.   Continued...