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Report: BHP Billiton withdraws offer to mine Tavan Tolgoi PDF Print E-mail
Friday, 23 January 2009
ImageBHP Billiton has withdrawn its bid to mine the Tavan Tolgoi coking coal mine, according to Mongolian media. The value of coal at the mine has been placed at $2 billion. 

Tavan Tolgoi is believed to have 6.5 billion tons of high-grade coking and thermal coal. The site is located 130 kilometers northwest of Ivanhoe Mines' Oyu Tolgoi site.  

The agreement being negotiated would have allowed BHP Billiton to control 49 percent of the coal mine and the government of Mongolia would retain ownership of the remaining 51 percent. 

At the same time, reports indicate officials of America's Peabody Energy met with Mongolian government officials last week after BHP Billiton pulled out of the bidding process. 
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 1 Written by roydongen, on 2009-01-24 00:06:56, IP: 202.180.218.26
This is distressing information and also confusing information.  
Of course it is not good for Mongolia that one of the world most respected and environmental friendly mining companies, which stands for sustainable development where ever in the world they operate, withdraws from this major project for Mongolia. A clear indicator that maybe some lawmakers are still unaware of the economic realities. 
Confusing since in one sentence there is the conclusion that with 49% shares an investor can not control a mine which is for 51 owned by the State of Mongolia. 
Ownership, control, revenues are all matters to be negotiated well in any deal but having a majority in shares for a State doesn't always mean this State can do as it likes. 
In the Netherlands for example all natural gas fields are 100 % privately owned but by law all gas found must be sold to the State according to a certain price formula. It has never been a reason for Shell and Exxon to invest in the natural resources of the Netherlands and the people of the Netherlands have been assured for over 60 years now that they also benefit of the countries natural resources. 
I hope Mongolian government as well as the private sector will look to find a creative and sustainable solutions and will keep in mind the interest of both parties involved.

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