Marubeni, GDF Suez Among Final Bidders for Mongolia Power Plant

Mongolia short-listed companies including Marubeni Corp. (8002) and Daewoo Engineering & Construction Co. (047040) among the final bidders to build a $1 billion power plant in the Gobi Desert.

Kansai Electric Power Co. (9503) also made the short list, along with a joint bid made by GDF Suez (GSZ) SA and Posco Energy Corp, according to a statement on the website of the state-owned Tavan Tolgoi Power Plant. It doesn’t indicate when a winning bidder will be named.

Coal miners operating in the Tavan Tolgoi coal basin, which contains 6.4 billion tons of reserves, include state-owned Erdenes Tavan Tolgoi LLC and Hong Kong-traded Mongolian Mining Corp. (975) The Tavan Tolgoi Power Plant (TTPP) will generate 450 megawatts of power, according to the company website.

Mongolia is in the midst of a resource boom, with billions of dollars pouring into the country to develop deposits of coal, gold, copper and other minerals. Road and rail projects are under way to deliver the minerals to neighboring China while a coal-fired power plant would help to power the mines and processing factories, including coal washing plants.

TTPP could also bring domestically generated power to the $6.6 billion Oyu Togloi copper and gold mine, the Rio Tinto (RIO) Group-controlled mine that is Mongolia’s biggest mining project.

Contractual agreements require Oyu Tolgoi to use energy produced in Mongolia within four years of commercial production, which began this year. The mine, which imports electricity from China, is located 130 kilometers (81 miles) southeast of Tavan Togloi.

To contact the reporters on this story: Michael Kohn in Ulaanbaatar at mkohn5@bloomberg.net; Yuriy Humber in Tokyo at yhumber@bloomberg.net

To contact the editor responsible for this story: Andrew Hobbs at ahobbs4@bloomberg.net

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