Thursday, 27 Oct 2011
Reuters reported that a contentious investment agreement on Mongolia huge Tavan Tolgoi coal deposit needs to be completed within three months to ensure that a much-heralded initial public offering for the project goes ahead on time.
Mr Terbishdagva Dendev a member of Mongolia Grand Khural parliament said on the sidelines of a conference in Hong Kong that discussions on an investment agreement for the western block of the coveted 7.5 billion tonne deposit were expected to get underway in November.
Mongolia plans to open the western block of the vast deposit up to foreign investors while the eastern block will be listed on international stock markets next year. An initial plan to grant 40% of the project to China Shenhua Group, 36% to a Russian-Mongolian consortium and 24% to Peabody Energy Corp of the United States was rejected by the Mongolian Security Council and branded as unfair by bidders from Japan and South Korea.
Mr Graeme Hancock chief operations officer with Erdenes Tavan Tolgoi the state owned entity in charge of the project told the conference that the scale of the IPO for the eastern block would depend on the investment agreement.
He said that "Once the terms of engagement on the west block are clear, that will have an impact on the IPO valuation. I am hoping there will be resolution on this in the very near future so this can be built into our future cash flow."
Mr Terbishdagva said that if an agreement was not signed within three months, the international IPO would have to wait until after Mongolia's parliamentary elections in June.
Analysts have expressed concern that political jockeying ahead of next year's elections was disrupting Mongolia's economy and harming its investment climate.
(sourced from Reuters)
Reuters reported that a contentious investment agreement on Mongolia huge Tavan Tolgoi coal deposit needs to be completed within three months to ensure that a much-heralded initial public offering for the project goes ahead on time.
Mr Terbishdagva Dendev a member of Mongolia Grand Khural parliament said on the sidelines of a conference in Hong Kong that discussions on an investment agreement for the western block of the coveted 7.5 billion tonne deposit were expected to get underway in November.
Mongolia plans to open the western block of the vast deposit up to foreign investors while the eastern block will be listed on international stock markets next year. An initial plan to grant 40% of the project to China Shenhua Group, 36% to a Russian-Mongolian consortium and 24% to Peabody Energy Corp of the United States was rejected by the Mongolian Security Council and branded as unfair by bidders from Japan and South Korea.
Mr Graeme Hancock chief operations officer with Erdenes Tavan Tolgoi the state owned entity in charge of the project told the conference that the scale of the IPO for the eastern block would depend on the investment agreement.
He said that "Once the terms of engagement on the west block are clear, that will have an impact on the IPO valuation. I am hoping there will be resolution on this in the very near future so this can be built into our future cash flow."
Mr Terbishdagva said that if an agreement was not signed within three months, the international IPO would have to wait until after Mongolia's parliamentary elections in June.
Analysts have expressed concern that political jockeying ahead of next year's elections was disrupting Mongolia's economy and harming its investment climate.
(sourced from Reuters)
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