Mongolia annuls IPO order for giant Tavan Tolgoi coal mine
ULAANBAATAR – Mongolia has scrapped an executive order calling for its giant Tavan Tolgoi coal project near its southern border with China to be funded through an international initial public offering, the country's Cabinet said.
The massive project with estimated reserves of more than seven-billion tonnes of coal has long sought to raise money to fund transportation infrastructure that will allow it to deliver coking coal to markets in China and beyond.
But the Cabinet said on Monday it has annulled a resolution last year calling for an international IPO to help fund the project and related railway links.
It cited "political distortions" as the reason behind the annulment, with unions representing workers at the project opposed to the way the project plans to meet its obligations to distribute dividends to the public.
The long-awaited listing has also been repeatedly delayed because of waning interest from international markets and concerns about the future of coal investments.
Mongolia has struggled for years to find financing for the project after first offering a large section of the project to a consortium of international investors 10 years ago.
The state firm running the mining project, Erdenes-Tavan Tolgoi, had originally aimed to build a rail link that will deliver 30-million tonnes of coking coal to China per year by 2021.
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