Source: AFP                   Date: 17 February, 2011

Mongolia this week finished interviewing foreign banks seeking a role in the initial public offering of Erdenes Tavan Tolgoi, owner of a massive coal deposit in the Gobi desert, an official said. Analysts said Goldman Sachs, UBS and Deutsche Bank were among more than a dozen investment banks that had submitted applications to advise on the IPO, which is expected to raise up to USD2 billion.

The government launched the interview process in Ulaanbaatar, an official at state-owned Erdenes MGL LCC, the parent of Erdenes Tavan Tolgoi (ETT), said, without providing further details.

Tavan Tolgoi is a "very big deal for the Mongolian government" and foreign investors will be aware of reports that officials were not "entirely happy with the way the Oyu Tolgoi deal played out," Mr. Neil Ashdown, an analyst at IHS Global Insight, said, referring to an earlier deal. "If the model being used here is seen as successful, then the banks that helped to implement it would be in a strong position for further lucrative work in future."

ETT is planning to contract out the development of Tavan Tolgoi to a private company or consortium, and the government is currently considering a shortlist of 15 companies. World Bank senior mining specialist Graeme Hancock said that it could take up to two years for ETT to be listed because the government needs to "put in place all the corporate governance systems".