Mongolia council rejects plan for key coal project

AP News
Posted: Sep 19, 2011 12:20 AM

Mongolia's National Security Council has rejected a plan for U.S. mining giant Peabody Energy, China's Shenhua Group and a Russian-Mongolian consortium to jointly develop the keenly sought Tavan Tolgoi coking coal deposit in the Gobi Desert.

Mongolian officials said in a news conference that they would hold new negotiations with the various companies involved.

In July, the Mongolian government reached a tentative deal with the mining companies in which Shenhua would hold 40 percent, with Peabody taking 24 percent and the consortium 36 percent.

Tavan Tolgoi is one of several big projects Mongolia has been debating as it strives to ensure local interests are protected while tapping foreign expertise needed to develop the resources.