Anglo American looks to tap into Tavan Tolgoi coalfield

Anglo American is looking to tap into Mongolia’s Tavan Tolgoi deposit as it joins a group of mining companies in the hope of developing the West Tsankhi block of the massive coalfield.

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Graeme Hancock, the mining major’s new chief for Mongolia, reportedly told Bloomberg that Anglo is interested in working on the deposit in partnership with state-owned Erdenes Tavan Tolgoi (ETT).

An Anglo spokesman declined to comment on the particular report but told Steel First: “Anglo American looks at all manner of opportunities around the world.”

Companies including Peabody Energy and China’s Shenhua Group are among the contenders looking to secure rights to develop the West Tsankhi block, which is expected to produce 20 million tpy of coking coal by 2017.

“Clearly, Tavan Tolgoi would fit our criteria. However, that means we would have to demonstrate to the government and to Erdenes Tavan Tolgoi that we would be a partner choice for them,” Hancock was quoted as saying in the Bloomberg report.

“If the government felt that we could add value, particularly with our relationships with the Chinese market, then we would happily discuss any portion of the coal field,” he reportedly said.

The Mongolian government is expected to make a decision on the developers soon, after postponing from the end of last year.

ETT started mining in the East Tsankhi block in 2010 and has a run rate of 3.5 million tpy of coking coal. It is expected to reach 20 million tpy in 2016.

The state-owned miner started mining operations in the West Tsankhi block in October last year and invited Peabody to discuss potential co-operation as a mining contractor.