Leighton Holdings, the world”s biggest contract miner, is confident it will eventually be chosen to develop the Tavantolgoi deposit in Mongolia, its chief executive Wal King said last week. Mongolia recently scrapped plans to sell 49 percent of Tavantolgoi, snubbing bidders like BHP Billiton and Vale in order to keep the whole deposit for itself and develop it with a contract miner.
King said he did not expect any action on Tavantolgoi anytime soon and did not mind the delay as Leighton already had plenty of work in Mongolia. He said it would take time for the Government to work through all the decisions needed to go ahead. “It”ll probably suit us if it”s a bit slower,” he said.
Mongolia is a huge growth market for Leighton, which got its foot in the door with a USD428-million-a-year contract to develop the Ukhaa Khudag mine next to Tavantolgoi in southern Mongolia, which started producing last year. It is slated to double annual production there to 5 million tons by end-2010 and build a railroad across the Gobi desert to transport the coal, now trucked to Chinese steel mills.
Leighton, controlled by German construction group Hochtief, is also in line to develop a coal mine in western Mongolia, expected to produce 3 million tons a year, King said. “They expect in the next few months to announce that that mine will go ahead, and we will be the contractor,” he said.
The big prize, however, would be winning the Tavantolgoi contract. The mine is estimated to hold 6.5 billion tons of high-quality coking coal, with potential annual production of 20-40 million tons. King said its size was “staggering”. Asked whether he expected Leighton to win the deal, he said, “We”re always confident.”