The Director of state-owned Erdenes MGL, B.Enebish, has told Reuters that the highly anticipated initial public offering by Erdenes Tavantolgoi will take place at the end of 2011 or the first quarter of 2012.  In another development, a South Korean consortium has signed a deal to build a railway line for the world”s largest untapped coking coal deposit.

The IPO is a key step for impoverished Mongolia to raise funds and develop its massive mining resources, with fast-growing nations such as China, India and Korea clamoring for more minerals. The Mongolian government could announce the listing venue for the IPO by as early as June. The IPO is estimated by bankers to be in a range of $1.5-5 billion, Enebish has said.

“Consultation on the stock exchange will be done with the banks after discussions with the Hong Kong and the London stock exchanges,” he added. “We need to see which will be more beneficial. There are many issues.”  He declined to comment on the potential size of the IPO, saying, “It”s a little early to talk about the size of the offering, but we have high expectation on that.”

The deal would also be a boon for Goldman Sachs Group Inc , Deutsche Bank AG , BNP Paribas SA and Macquarie Group Ltd , which have been short-listed to manage the offering.

Erdenes, the state-owned company in charge of the eastern block of Tavan Tolgoi, plans to keep 50 percent of the project, and will distribute 10 percent of the shares to local residents, 10 percent to Mongolian companies and 30 percent in the form of the IPO. The west Tsankhi block of the mine has 1.2 billion tonnes of coal reserves and could produce 15 million tonnes annually for more than 30 years.

Mongolia has short-listed ArcelorMittal SA , Vale SA and Xstrata Plc among six bidders to develop Tavan Tolgoi. U.S. coal miner Peabody Energy Corp , a consortium of China”s Shenhua Group and Japan”s Mitsui & Co Ltd , and a separate consortium of Japanese, South Korean and Russian companies were the other preferred bidders.