Erdenes Tavan Tolgoi plans to start mining coal in the West Tsankhi area. The goal is to increase the company’s production to pay off debts of $186 million to Aluminum Corporation of China or Chalco and $200 million to the state-owned Development Bank of Mongolia. Erdenes TT believes it can pay off its debt to Chalco in half a year.
It plans to produce 2.6 million metric tons of coal at West Tsankhi this year and another 5 million in the East Tsankhi area. Overall next year, the company expects to mine 15 million metric tons of coal and double that amount by 2017.
In 2011, the plan was for a consortium of companies from China, Russia, and the United States to mine West Tsankhi, but the plan was abandoned due to difficulties in communicating with one another because of a lack of a shared language. Erdenes Tavan Tolgoi will revisit the involvement of a foreign company.
In addition to mining the West Tsankhi coal area, the company will invest in a plant to wash coal and a water supply project.
When these infrastructural developments are completed, Erdenes Tavan Tolgoi will sell shares to the public in order to raise money to expand and increase the value of shares already owned by Mongolian citizens.
(Edited from Bloomberg)