Source: Bloomberg                         Date: 18 November, 2010

Mongolia will use a bidding process this month to choose a contractor to mine in Tavan Tolgoi, a region with one of the world’s largest untapped deposits of coal for making steel, a Ministry of Finance official has said. “The auction will be decided by the end of this month and the operation of the mine will be handed over as soon as possible, perhaps in December,” Mr. D.Togmid, deputy director-general at the Ministry’s development financing and cooperation department, said in an interview in Tokyo. He was attending a Mongolian-Japanese business forum.

Mongolia wants to retain ownership of new mines including Tavan Tolgoi. China Shenhua Energy Co., the biggest Chinese coal producer, is among the companies that have said they want to develop Tavan Tolgoi.

Mr. D. Zorigt, the country’s Minister for Minerals and Energy, has said the government is seeking investment in railroads and other infrastructure to temper risks associated with a mining boom. Linking Tavan Tolgoi with an industrial park at Sainshand, the capital of Dornogobi province, will cost USD2 billion, Mr. Togmid said. Mongolia’s railway policy calls for new tracks to be laid in the existing broad gauge or 1,520 millimeters  that is also used in Russia, rather than China’s standard gauge, according to presentation materials for a speech at the forum by Mr. Ch. Ganbat, adviser to the Minister of Road, Transportation, Construction and Urban Development.