Shenhua, China’s leading coal miner, has been interested in
Tavan Tolgoi since 2003. The company’s president Ling Wen recently said Shenhua
had submitted its bid for a second time, adding that it “has the greatest
competitive advantage over other bidders”.

The Mongolian government said previously that successful
bidders must also invest in infrastructure construction in the country as part
of the deal. Since the start of 2009 Shenhua has been building the Gan Quan
Railway to transport coking coal from Tavan Tolgoi. The CNY4.7 billion railway
will be completed and put into operation in 2011.

“Compared with their foreign counterparts, Chinese
enterprises are not necessarily well positioned to win the auction,” said an
analyst, citing the example of Australian and Japanese enterprises, which have
offered training programs to their Mongolian employees. “But Chinese
enterprises could make good use of the deepening Sino-Mongolia economic
cooperation, echoed by Premier Wen Jiabao’s upcoming visit to Mongolia, during
which Wen is expected to discuss with his Mongolian counterpart the issue of
financing Mongolia’s mineral resources projects,” he added.