Tavan Tolgoi

housing at the project The Tavan Talgoi deposit was discovered by a Soviet exploration team that included the first Mongolian geologist Jaltsavyn Dugersuren in 1945, and exploratory drilling and feasibility studies continued until 1985. After Mongolia's democratic transition in 1990/91, the government allowed foreign companies to explore the deposit. BHP gained the exploratory rights in the early 1990s; however, they relinquished the rights in the mid-1990s because of financial concerns. In 2006, the government awarded Energy Resources LLC the mining license over the Ukhaa Khudag section (license MV-11952). The government also amended the Minerals Law in 2006 and identified 15 strategic deposits (allowing the government greater ownership of mines), of which Tavan Tolgoi was one. In 2007, the government decided to review the ownership and investment rights over Tavan Tolgoi, and the prime minister (Bayar Sanjaa) proposed to renationalise the deposit - the government would gain 50%, Energy Resources keeping 14% and other investors the remaining 36%. Erdenes MGL LLC was formed as a wholly government-owned company in 2007, and later that year the government renationalised Tavan Tolgoi, leaving Energy Resources with the Ukhaa Khudag section. The government began negotiations in 2009 with mining companies to give them a 48% stake in Tavan Tolgoi. BHP was initially interested in, but in early 2009 withdrew its bid. After this, Peabody Energy (an American mining company) reportedly approached the government interested in the deposit. However, in 2011 the government announced plans for an IPO of 29% of Erdenes TT, and to continue to give 10% of the shares to citizens and reduce from 20% to 10% the amount given to Mongolian companies, with the government to hold the remaining 51%. ==Sections==

East and West Tsankhi The Tsankhi section is the largest in the Tavan Tolgoi deposit, and there are plans to develop both East and West Tsankhi, although both developments have been surrounded by confusion and delays. There is often a misunderstanding that the title ‘Tavan Tolgoi’ refers to the Erdenes Tavan Tolgoi development in Tsankhi, since this is the largest and highest profile area in the entire coal deposit; however Tavan Tolgoi covers a much larger area. West Tsankhi The West Tsankhi section of the Tavan Tolgoi coal deposit has been in operation since 1967, as a small coal mine. It supplied coal to the Mongolian domestic market, but in August 2011, started exporting coal to China In 2009 in order to maximize the mine's production, the Mongolian government put the mine up for international companies and consortia. Six companies were shortlisted – Shenhua Group, ArcelorMittal, Kores, Peabody Energy, Vale S.A., Xstrata among others. In July 2011 it was reported that the government had awarded the contract to mine West Tsankhi to China's Shenhua Group, a Russian-led consortium, and US miner Peabody Energy Corporation. However, in August, officials said that no decision had been finalised, and now a final decision on it is not due until later in 2012. Recently, Dr Graeme Hancock (COO of ETT) cited the difficulty in managing the multiple companies interested in the consortium. East Tsankhi The East Tsankhi section is fully owned by Erdenes Tavan Tolgoi, who chose the Macmahon Holdings and BBM Operta joint venture to mine the site. The contract is for five years, from 2012-2017 and is worth US$500 million. Production from the mine is expected to be 3 million tonnes in 2012 and reaching a maximum production of 15 million tonnes per year once the mine and its associated infrastructure is built, with a total value over five years of US$2 billion. In 2010 the Mongolian government decided on a plan to float 30% of Erdenes TT in an IPO on the Hong Kong, London and Ulaanbaatar stock exchanges; however this was later reduced to 20% in January 2012. The IPO was intended to occur in 2011, but was postponed to late 2012 or early 2013. In addition, 10% of the Erdenes TT will be sold to local companies, 10% will be distributed in shares to every Mongolian citizen, and the government will retain the remaining share in the company. There is speculation that the Hong Kong listing may be dropped, but this has been denied by the company Borteeg Borteeg is a central section being tendered to investors for phased development by Erdenes Tavan Tolgoi. In 2026, Erdenes Tavantolgoi launched a targeted development of the Borteeg coking coal block, a central section of the Tavan Tolgoi deposit, inviting international investors through a request for expressions of interest. This block-by-block approach reflects a strategic shift from earlier attempts to sell or partially privatize the entire Tavan Tolgoi complex, aiming to minimize political and operational risk while monetizing the 424 million ton coal reserve. The Borteeg initiative could generate over $1 billion in export revenue if successfully developed, setting a potential template for unlocking other parts of Tavan Tolgoi. Ukhaa Khudag The Ukhaa Khudag section of Tavan Tolgoi deposit covers an area of 2,960 ha and has reserves of 581 million tonnes. It is owned and mined by the Mongolian Mining Corporation (formerly Energy Resources LLC); they were granted a mining license in August 2006, and began mining in April 2009. Production at the mine has increased to 2.1 million tonnes in the first quarter of 2012. MMC constructed a road from Ukhaa Khudag to the Gashuun Sukhait border crossing (finished in October 2011). The road charges other mining companies a fee for use - there are now concerns that trucks are avoiding the toll and driving parallel to it, causing erosion and pollution issues. In 2012, MMC announced plans to construct a railway from Ukhaa Khudag to the Gashuun Sukhait border crossing, to be completed in 2015. While that particular plan apparently did not come to fruition, the railway along the same or similar route was said to be under construction as of 2014, with the estimated completion date in late 2016. A special vote of the Mongolian Parliament made it possible to construct this railway on the 1435 mm standard gauge (for a seamless connection with China's railway network), rather than on the 1520 mm Russian gauge used elsewhere in Mongolia. The 233-km long railway from Tavan Tolgoi to Gashuunsukhait border port came online on September 9, 2022. == References ==