Posts tagged coal

Mongolian Mines and Investors

By Martin Saxer | April 30, 2012

After much to and fro over the mining concesssion for Mongolia’s Tavan Tolgoi coal deposit, it may well be that none on the international bidders may success. Terence Edvards for Reuters:

Speaking at a regular meeting of leaders from Mongolia’s private sector on Monday, Graeme Hancock, the chief operating officer of Erdenes-Tavan Tolgoi, suggested that the Mongolian government would not be able to appease the diverse foreign investors hoping to invest in the project.

“In my view, this is a very difficult group to put together into a consortium,” said Hancock. “We’ve got a pretty good chance it will never happen.”

If that were the case, Erdenes-TT was likely to reassume control of the property and lead the western block of the project itself, he said.

For an anthropological view of Mongolian mines and geopolitics, listen to the keynote Uradyn Bulag delivered last month at our conference “The Art of Neighbouring”.

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Mongolia frets as giant coal mine launch looms – M.A.D

By Martin Saxer | August 11, 2011

Earlier this year, mining rights for the western section of the immense Tavan Tolgoi cole mine in Mongolia’s Gobi Desert were split between a Chinese, a Russian, and a Western consortium. A potential USD 15 billion bid for the mine’s eastern block is scheduled for next year. The well-informed Mongolia-based concultancy M.A.D has published its take on the state of affairs:

At stake is the promise of prosperity for Mongolia’s 2.8 million citizens, many of whom live on the edge of subsistence. The mine’s transformational potential also has implications as a whole for the region, which produces more than half of the world’s steel and aims to wean dependence on primary coking coal supplier Australia. But Mongolians are worried that their two powerful neighbours, China and Russia, will take their resources on the cheap unless key donors Japan and South Korea join the bidding — a point crucial for parliamentary approval later this year.

Which means that the results of the initial bid are anything but final.

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The Washington Post: China, rich with coal, seeks more next door in Mongolia to meet its energy needs

By Martin Saxer | July 18, 2011

Andrew Higgins for The Washington Post on the coal mining boom and  Mongolia’s Tavan Tolgoi pit (Ömnögovi Province). He argues that the boom is driven by China’s continuing demand for coal. Although the PRC has huge coal reserves itself it still needs to import more to satisfy demand. However, there is competition over access to Mongolian coal:

China and Russia have offered money to help finance Mongolia’s railway-building plans from Tavan Tolgoi. Beijing wants the line to head south and use Chinese-gauge tracks. Moscow wants it to go toward Russia and to use Russian-width track, which is incompatible with China’s network.
For the moment, tangled feelings toward China have trumped linear economic logic. But, predicted Od, the former diplomat in Washington, this will change. China is “like a big vacuum that sucks everything in,” Od said. “We are very lucky.”

Higgins works out the paradox quite nicely. He cites a recent opinion poll on the question what country would the best partner for Mongolia. China came in last. However, at the same time:

There are now more students studying Chinese in Mongolia than Russian, once a lingua franca in what was until 1991 an effective Soviet colony.

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