Mongolia Seeks Partner for Coal Railroad to China, Montsame Says

The Mongolian government is seeking a non-state partner to build a 160-mile (260-kilometer) railway from the Tavan Tolgoi coal field to the Chinese border, the state-run news agency Montsame reported.

The government has accepted bids from 20 companies, including 14 from overseas, the agency said yesterday, without identifying any. The partner will take a 49 percent stake in the project.

Tavan Tolgoi, one of the largest coal deposits in Mongolia, has an estimated 6.4 billion metric tons of reserves, 70 percent of it coking coal for steelmaking. Mining companies at the site, including Hong Kong-listed Mongolia Mining Corp., currently deliver supplies to the border by truck.

More than one bidder may be chosen, raising the possibility of a joint venture, Montsame said, citing Prime Minister Norovyn Altankhuyag. The state-controlled Development Bank of Mongolia LLC will contribute $200 million to the project.

To contact the reporter on this story: Michael Kohn in Ulaanbaatar at mkohn5@bloomberg.net

To contact the editor responsible for this story: Amanda Jordan at ajordan11@bloomberg.net

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