Mongolia said its decision on
three shortlisted bidders for massive Tavantolgoi project was not final yet as
South Korea complained the bidding process was “unclear and unfair”,
Reuters reports. The latest development adds more confusion to the hotly
contested deal, which has been undermined by political considerations.

Earlier this week, Mongolia
said it picked US miner Peabody Energy , China”s Shenhua and a Russian-Mongolia
consortium out of six preferred bidders and the proposal needs parliamentary
approval. But it did not mention names of major partners of the shortlisted
bidding groups.

The Mongolian ambassador to
China said last week that the government would consider the interests of its
two neighbors, China and Russia. “We are still in talks with the
companies. It”s not final yet,” executive director of state-owned Erdenes
MGL, which owns the deposit, B. Enebish told Reuters.

Mongolia relies heavily on
China for its commodities for exports, but is in talks to access Russia”s
railways and ports as it looks to build new trade ties with other countries in
the Far East.

South Korea said the
Mongolian government had asked the preferred bidders in April to form one grand
consortium for the project and bidders had since been in talks to meet the
request. “While we were still in talks, Mongolian government unilaterally
announced three shortlisted bidders without negotiations with the
participants,” Seoul”s energy ministry said in a statement.

Mongolia picked a newly
formed Russian-Mongolia consortium and excluded Korean and Japanese firms, it
said. “We are trying to nail down the exact composition of the
Russia-Mongolian consortium…will tap the possibility of additional talks with
the Mongolian government as this international bidding process has been unclear
and unfair,” the statement said.

Members of the South Korean
firms which participated in the Russian-Korean-Japanese consortium include
state-run Korea Resources, POSCO , utility firm KEPCO, trading firm LG International
and Daewoo International. Japanese firms in the group include Itochu Corp ,
Sumitomo Corp , Marubeni Corp and Sojitz Corp. “We are still under
negotiation. Our understanding is that this is not the final decision,”
said an executive of one Japanese firm, which is part of the consortium.

China”s Shenhua teamed up
with Japan”s Mitsui & Co but the Japanese firm”s name was dropped without
explanation. Mitsui said they haven”t received notice from the Mongolian
government and have no information whether they are still in.

The head of state-owned
Erdenes MGL, which owns the Tavan Tolgoi deposit, said talks were still
continuing. The capricious nature of Mongolia”s democratic government has
complicated foreign investment projects in the country.