It will share the Mongolian field with China and Japan

coal industry

Russia, represented by the consortium of Severstal, Renova and Basic Element, will not become the main partner of the Mongolian side in the development of Tavan Tolgoi, one of the world's largest coal deposits with reserves of 6 billion tons. The Mongolian authorities plan to divide the field between all interested parties, including China and Japan. This means that the Russian side will receive not half, as planned, but not more than a quarter of the deposit.

As a high-ranking source in the Mongolian government told Kommersant, the country's authorities do not want to give the rights to develop Tavan Tolgoi to one contender. According to Kommersant's interlocutor, the government is inclined to divide the rights to the field between all interested parties by creating a joint venture with their participation. The Renova group, which is among the contenders for Tavan-Tolgoi, confirmed to Kommersant that they know about the plans of the Mongolian authorities to divide the field between all interested structures.

Chinese and Japanese corporations have already received preliminary consent from Mongolia to participate in the project. As a source in one of the relevant Mongolian ministries clarified to Kommersant, Japanese Mitsui and Sumitomo and Chinese Shenhua Group Corporation Limited are laying claim to Tavan Tolgoi. At the same time, the Kommersant interlocutor notes, the access of Russian companies to Tavan Tolgoi “is in question, since, unlike the Chinese and Japanese, the Russian side has not yet made a specific investment proposal.”

Tavan Tolgoi is located in the south of Mongolia, 250 km from the border with China. Coal reserves at the field are estimated at 5-6 billion tons, its value is more than $300 billion. About 40% of the field's reserves are high-calorie coking coal, which is the main raw material for ferrous metallurgy. The license to develop Tavan Tolgoi belongs to the Mongolian Energy Resources.

Previously, it was assumed that Mongolia would give exclusive rights to develop Tavan Tolgoi to the Russian Severstal. In the spring, a meeting between the Mongolian Minister of Transport Tsegmed Tsengel and his Russian counterpart Igor Levitin took place in Moscow (see Kommersant on April 6). It was discussed that Russia would take part in the construction of 1.5 thousand km of roads in Mongolia in exchange for Severstal's access to Tavan Tolgoi. In a memo addressed to Russian President Vladimir Putin, Severstal owner Alexey Mordashov wrote that he was ready to invest $1.5 billion in the development of the field. It was assumed that the president would discuss the situation with his Mongolian counterpart in June at the summit of governments of the Shanghai Cooperation Organization. However, no developments in the situation around Tavan Tolgoi were reported after the summit.

But around the same time, it turned out that other Russian companies were also laying claim to Tavan-Tolgoi - Renova of Viktor Vekselberg and Basel of Oleg Deripaska. Kommersant reported this on May 31, and Prime Minister Mikhail Fradkov reported this during his July visit to Ulaanbaatar (see Kommersant on July 13). To avoid competition with each other, all three companies recorded their intention to develop Mongolian coal in an alliance back in July in the protocol of the intergovernmental commission of Russia and Mongolia. One of these days they will make an official statement about this.

Meanwhile, Mongolia recently adopted a new law on mineral resources, according to which the country can retain up to 50% of the shares in any subsoil user company. That is, subject to parity, each foreign party in the project will get a little more than 16% of the shares.

However, Russian bidders, each of whom would receive only about 5% of Tavan Tolgoi in this situation, say they still remain interested in the field. Renova representative Andrei Shtorkh told Kommersant that “the company has nothing against partners from other countries.” “This is even better, since there will be someone with whom to share the costs of development, construction of the railway and the enrichment plant,” explained Mr. Storch. According to him, investments in Tavan Tolgoi could amount to up to $5 billion. Severstal also reported that it would remain in the project. Basel declined to comment. According to a Kommersant source in diplomatic circles, Russia's official position on participation in the project should be announced in December during the visit of Mongolian President Nambaryn Enkhbayar to Moscow.

Elena Kommersant-Kiseleva, Maria Kommersant-Cherkasova

Russia was demoted to Tavan Tolgoi