Invesco Emerging Markets Sovereign Debt ETF V.PCY

Mongolia

[GiuseppebuysSilver]

UPDATE 1-Mongolia state-owned miner signs coal deal with China's Chalco
Wed Jul27, 2011 12:47am EDT

(Reuters) - Mongolia's state-owned minerErdenes Tavan Tolgoi (TT) has agreed to sell $250 million worth of coal fromthe east Tsankhi deposit to Aluminium Corp ofChinaLtd(Chalco) , a move insiders said was aimed at raising cash to help fund itsimpending listing fees.
Under the agreement, Chalco would resell 30 percent ofthe coal to Japanese trading houses Itochu Corp and Mitsui as well asstate-owned Korea Resources Corp (KORES), Erdenes TT LLC said in a statementseen on Wednesday.
Erdenes TT said a signing ceremony was attended byChina's ambassador to Mongolia and delegates from Chalco. It has also signedpurchasing agreements with Itochu, Mitsui and Kores.
The government has split the massive Tavan Tolgoi coalfield into two sections for development. The east Tsankhi area is owned byErdenes TT, which is planning an initial public offering worth as estimated $10billion, while the west Tsankhi block is being auctioned to miners via aninternational tender.
A source involved in the listing of Erdenes TT saidthe government has been working hard to raise $500 million of initial fundingneeded to kick off the IPO process.
"The overall capex for the project is well intothe billions over the life of the mine so $500 million is just a drop in thebucket to get this project moving," said the source who asked not to beidentified as his firm was still competing to windealsrelatedto the IPO.
Erdenes TT did not say how much coal would be sold toChalco under the $250 milliondeal, but it said the agreement would expirewithin one to 1-1/2 years. However, a newspaper report quoted B. Enebish, headof state-run Erdenes MGL, as saying the deal would last for five years.
After the deal expires, Chalco would then have to paymarket price for the coal, Erdenes TT said. But it was unclear whether Chalcowould continue to be the sole recipient of the coal from east Tsankhi depositwhen the agreement expires.
Erdenes TT could not be reached for comment.
The government has said that it hopes to list ErdenesTT by late 2011 or early 2012, and the company would likely be listed inLondon, Hong Kong, or both.
Land-locked Mongolia, which has an gross domesticproduct of just about $6 billion, is banking on the development of its massivecoal and copper resources to lift the nation out of poverty and help fundmuch-needed infrastructure projects across the country. (Reporting by KhaliunBayartsogt, additional reporting by David Stanway in Beijing; Writing byFayen Wong; Editing by Jonathan Hopfner andKen Wills)

https://www.reuters.com/article/2011/07/27/mongolia-erdenes-idUSL3E7IR0HR20110727