The Government of Mongolia is hurrying to finish construction of a rail link connecting the Tavan Tolgoi mine with the Gashuun Sukhait border crossing within two years. A 49% stake of project funding to cover the project is expected to come from China's Shenhua Group LLC. Previously, in the cabinet's "100 day report", Transport Minister D.Ganbat said ‘to sell 49% stakes of the Tavan Tolgoi railway to Shenhua Group’. This seems to be the Mongolian Government's official plan.

Ts.Dashdorj, Mongolian Minister of Mining and Heavy Industry and other officials entered into hammering out a new deal with a delegation from China's biggest coal producer Shenhua Group on Friday (9th of December). The Government had planned to ‘move’ mega projects to the  2017 state budget.

The Government of Mongolia issued a decision to develop and extend the  Tavan Tolgoi mine in 2010. Since then, Mongolia has announced two tenders for investors in Tavan Tolgoi –  but these were unsuccessful. On this occasion, the meeting between Mongolian Government and Shenhua Group came to foreign media attention and Mongolians are left wondering  why had only a Chinese company been involved in the deal? .

Shenhua Energy,  a subsidiary of the Shenhua Group, has been selected as part of the investment consortium along with Japan's Sumitomo Corporation and the Mongolian Mining Corporation. It will be their responsibility  to develop and operate the mine.

Ts.Dashdorj noted that deal has only just started; but he didn’t explain  why only a Chinese company had been involved.  In addition, there was no accounting for the issue about Japan's Sumitomo Corporation and the Mongolian Mining Corporation. This increases suspicion, that the new Tavan Tolgoi deal will not be beneficial for Mongolia and that the railway construction project is a 100% Chinese project. 

In 2015, a working group led by M.Enkhsailhan, former special minister of Mongolia, selected an  investment consortium including the Mongolian Mining Corporation, Japan's Sumitomo Corporation and China's Shenhua Group following a tender. After a three month-long discussion with them, they  partially agreed  to provide US200 million for the repayment of the Mongolian Government's debts to Chalco debts, and a 'built, operate, transfer' (BOT) project for a new railway, which will be handed back to Mongolia after 30 years. However, the tender was scuttled due to the involvement of former Parliamentary Speaker Z.Enkhbold, MP Kh.Battulga and L.Erdenechimeg.

Mongolia cannot finance its own 51% stake in the Tavan Tolgoi railway project – the state coffers are nearly empty and the budget deficit is fast approaching  a trillion MNT. Mongolia cannot borrow anything and there is not enough money in the Development Bank of Mongolia to cover previous debt repayments.  On this occasion, if government borrows money from China to cover  Mongolia's 51%  stake in Tavan Tolgoi, the railway project will become 100% Chinese.