Brazilian
iron ore producer Companhia
Vale do Rio Doce (CVRD) announced that it, along with the Japanese
trading firm Itochu Corp, would commence a feasibility study for coal mining operations in southern
Mongolia.
The project would be the first coal development project in southern
Mongolia.
According to the project, Itochu and CVRD plan to develop the Tavan Tolgoi coal deposit, whose reserves are estimated at about 600 million tons. About 83% of the project's total output will be destined for use as
coking coal.
CVRD and Itochu will form joint ventures with other Mongolian and Chinese firms to build roads, railways, a power plant and other infrastructure facilities required for the project.
If the project proceeds, it is expected to start yielding results in 2009. Most of the coal produced will be exported to
Japan and
China.