Mongolian Mine Essay

1754 Words8 Pages
------------------------------------------------- Top of Form Bottom of Form Geopolitics at a Mongolian Mine The Mongolian government is trying to divide a coking coal mine among Chinese, Russian and American interests A coalition led by China’s largest coal company Shenhua Group was granted a leading 40 percent share of a massive Mongolian mining project in July, leaving a Russian-Mongolian concern with 36 percent and U.S.-based Peabody Energy with 24 percent. Why did the Mongolian government agree to a three-way, international division of spoils for the western Tsankhi block of the Tavan Tolgoi coking coal project? Industry sources familiar with investing in Mongolia said the government, as expected, opted in part to satisfy China’s huge appetite for energy resources. The open pit Tavan Tolgoi, one of the world’s largest untapped mines, has proven reserves of 6.4 billion tons, including 1.2 billion tons in the Tsankhi block alone. But the government in Ulan Bator also wants to use the mine project to strengthen its longtime political and cultural links with Russia, according to the sources. Moreover, including Peabody was seen as a nod to America’s role as a geopolitical balancer in Asia, especially for Mongolia’s relations with China and Russia. Shenhua has long shown its interest in Mongolian coal investment. In 2009, the company started building an Inner Mongolia railroad line from the coal-belt city Baotou to Ganqimaodu at the Mongolian border – just 180 kilometers from Tavan Tolgoi. Shenhua’s current annual production capacity is about 400 million tons of coal. The company currently has about 70 billion yuan in cash available for acquisitions, said Huang Qing, Shenhua board secretary. Russia likewise has sought access to Tavan Tolgoi. And reportedly Moscow has pressured the Mongolian government for a stake in the pit by refusing to supply oil for

More about Mongolian Mine Essay

Open Document