Mining companies were first
attracted to Mongolia to extract copper, molybdenum and gold.  Now, the focus has shifted to coal, says an
analysis by Resource Investing News.  Besides
Tavantolgoi, there are dozens of coal mines in Mongolia with a combined
estimated potential coal reserves of some 100 billion metric tons. Most of
these reserves are proven but have not been developed due to a lack of
infrastructure. To put the size of the Tavantolgoi reserve in perspective, at
the current rate of production, Mongolia could still be mining coal from there in
10,000 years. Experts say Mongolia could earn between USD400 million and USD600
million in revenue from coal in just a few years, a figure that does not account
for new production at Tavantolgoi.

The Mongolian government
knows that it can rely on China”s purchases; however, it is working to ensure
it does not put all its eggs in one basket. The government has laid out a
controversial plan to build a new railway from the Gobi Desert to Russia,
linking to the Trans-Siberian railway in order to ship Mongolian coal to key
Pacific markets such as South Korea and Japan. “After building the railway to
Russia, we will focus on a railroad to China,” said D. Batkhuyag, the head of
the Mongolian Mineral Resources Authority. 
It does make more sense to look at building a railway to China; however,
the government does not want to be completely reliant on one country.

The Tavantolgoi coal deposit
takes up approximately 90 square km of land. The deposit is located in the
Ulannuur coal-bearing depression. The deposit occurs in a large synclinal
structure modified by faults and superimposed folding. The late Permian
coal-bearing sequence is up to 965 meters thick in the central part of the
syncline, and occurs within units of intercalated sandstone, siltstone, and
conglomerates. Overall, the coal-bearing sequence includes 16 coal seams
ranging in thickness from 2 meters to 72 meters. The aggregate thickness of
coal beds in the central part of the structure is 163 meters, occurring at a
maximum depth of 945 meters.