Mongolia has approved the plan for selling in an initial public offering (IPO) a 30 percent stake in Erdenes-Tavantolgoi, the state-owned company that will develop the country's huge Tavan Tolgoi coking coal deposit, aiming to raise about $1.5 billion, Bloomberg has reported, citing Mongolian Minister for Minerals and Energy Dashdorj Zorigt.
According to the plan approved by the Mongolian parliament, 50 percent of Erdenes-Tavantolgoi is to be retained by the government, 10 percent of the company is to be given to members of the public for free, in the form of ownership vouchers, while another 10 percent is to be sold to Mongolian businesses at a nominal price in order to involve them in the development of the giant deposit.
The Tavan Tolgoi mine, with estimated coking coal reserves of 6.5 billion metric tons located in the southern Gobi desert, has attracted interest from ten international mining companies, including China's Shenhua Energy, a Russian consortium led by Gazprom and Australian miner BHP Billiton.
Late last month, Mongolia approved plans for the construction of a 1,100 kilometer railway, which will connect the Tavan Tolgoi coal deposit to the Russian border. The project will make the country less dependent on exports to China and create more jobs.