UPDATE: Japan Talking To Mongolia, Not Complaining About Tavan Tolgoi
July 22 2011 - 5:06AM
Dow Jones News
Japan's Ministry of Foreign Affairs said Friday that there have
been recent high-level talks with Mongolia over the role of
Japanese companies in developing the country's huge mineral
reserves, but contrary to a recent report, there was no official
complaint from Tokyo about the bidding for a major coal
project.
The rights to be mine operator of Mongolia's planned Tavan
Tolgoi coal mines, which contain some of the world's largest
untapped coking coal reserves, are being hotly contested, including
by neighboring Russia and China.
A recent announcement by Mongolia after a two-year bidding
process didn't list Japanese or South Korean companies among the
winners, although several had been in short listed consortiums
whose other members were named. Mongolia said the winners were
China's Shenhua International Ltd. (SHU.AU), Peabody Energy Corp.
(BTU) and a Russia-Mongolia consortium.
"We have not confirmed if Japanese companies are indeed excluded
in the first place," a ministry official said. "We are still trying
to find out."
The clarification comes after Reuters reported Friday, citing
unnamed government officials, that Japan had filed a complaint with
Mongolia over the bidding process for the right to develop Tavan
Tolgoi.
Separately, a senior Mongolian government official said Friday
that talks were continuing. "The Japanese and the Koreans are
unhappy and are working to get themselves in," he said.
Japanese Vice Foreign Minister Yutaka Banno said Tuesday that he
hoped "Japanese companies participate in developing Mongolia's
mineral resources including the Tavan Tolgoi coal mine" in a
meeting in Tokyo with Mongolia's Minister for Road, Transportation
and Construction Khaltmaa Battulga, MOFA said in a statement on its
website.
Battulga responded by saying Mongolia "expects Japanese
companies' participation in mineral resource development projects
and related infrastructure businesses such as railroad," the MOFA
statement said.
Battulga also called for Japanese firms to invest in a state-run
rail company planning to link the coal mine with Russia, The Nikkei
newspaper reported Thursday.
Most of Mongolia's coal is exported to China, weakening its
ability to negotiate prices. The rail link would make it easier to
export coal to Japan and elsewhere, via Russia, Battulga said.
On July 5, South Korea's government complained that the bidding
for the contract had been unfair.
Itochu Corp. (8001.TO) Sumitomo Corp. (8053.TO), Marubeni Corp.
(8002.TO) and Sojitz Corp (2768.TO) were originally part of the
Russian consortium, while Mitsui & Co. (8031.TO) had partnered
Shenhua.
A spokesman for Itochu, who leads Sumitomo, Marubeni and Sojitz
in the bidding, said Friday it is unclear whether they have been
excluded or not.
-By Mari Iwata, Dow Jones Newswires; 813-6269-2798;
mari.iwata@dowjones.com
-- Venkat Ramakrishnan in Singapore contributed to this
article.
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