Mongolian president Ts Elbegdorj has stepped in to resolve a year-long impasse regarding the proposed private development of a large part of the country’s largest coalfield.  1

In what is being touted as Mongolia’s biggest foreign investment project since the commissioning of the US$6 billion Oyu Tolgoi copper mine, the West Tsankhi area of the Tavan Tolgoi deposit has been at the centre of protracted negotiations between the government and major companies, including Peabody Energy, OAO Russian Railways and China’s Shenhua Group.

Elbegdorj has announced a deadline of the end of 2012 to settle the issue. He says choosing the companies to develop the deposit will be a crucial part of the planned US$3 billion public offering of the company which holds the rights to the land, Mongolia’s state-run Erdenes Tavan Tolgoi JSC.

During the last 12 months, reviews of an accord, among other options, that would give Shenhua a 40% stake in West Tsankhi, Peabody a 24% share and the remaining share to a Russia-Mongolia group have led to much controversy, with some politicians calling for the government to instead develop the coalfield itself.

Mongolia’s Business Council head Jim Dwyer says, “If this situation can get resolved, the economic benefits to Mongolia are second only to Rio Tinto’s Oyu Tolgoi mine. Given the complex, United Nations-like cast of governments involved, the talks may not go so quickly.”

In other news, Ivanhoe Mines, which is one of the companies behind Mongolia’s massive Oyu Tolgoi mine complex, has changed its company name to Turquoise Hill Resources.

The name change has received shareholder approval with the new name expected to become effective from next month. The company has also appointed two new directors and expects to appoint an additional two directors in the near future to take the board to thirteen members.

Ivanhoe’s partner Rio Tinto is looking to raise the US$5 billion needed to complete the next phase of Oyu Tolgoi by tapping into the Chinese copper market, supplying ore from the project from next year.

This progress comes as Aluminium of China (CHALCO) shareholders approved the purchase of a major stake in Ivanhoe’s Mongolian subsidiary SouthGobi Resources. The deal is worth more than US$920 million for a 60% share. However, the planned purchase may be at risk of rejection by the Mongolian government, due to its new law limiting foreign investment ownership to 49%. and