Column: BHP joins the lengthening list of nickel price casualties
Indonesia's nickel production surge is challenging the West's ambitions of diversifying its critical metals supply chains.
Mongolia’s plans, first mooted in 2010, to to sell a stake in its Erdenes Tavan Tolgoi coal-mining company to the public may be delayed until October from the planned June IPO.
The country hopes to raise as much as $3 billion, putting the valuation for the company at $15 billion through a listing in London, Ulan Bator and Hong Kong.
Only problem is the Hong Kong stock exchange does not count Mongolia as one of the 20 jurisdictions from where it accepts listings from.
Hong Kong is now working with Erdenes-TT, as the company will be known, to find an accommodation. Bloomberg quotes Mark Dickens, head of listing at Hong Kong Exchanges & Clearing as saying HKEx is “keen to work with the Mongolian regulators to facilitate the listing of Mongolian issuers in Hong Kong.”
The privatization process will see Mongolia’s government holding a majority 51% stake after selling 19% to investors and distributing the remainder to its 2.7 million citizens.
The Tavan Tolgoi deposit – mined since the 60s – in the South Gobi desert is the world’s largest with a 6 billion tonne resource of high-quality coking coal used in steelmaking.
Metallurgical coal has been trading at around the $220–$235 per tonne level in January this year, down from record levels of $330/tonne last year.
Mongolia has also relaunched talks with international miners on developing the western block of Tavan Tolgoi which on its own holds 1.2 billion tonnes after a shambolic bidding process that stretches back to 2007.
Mongolia’s National Security Council rejected a deal struck with US giant Peabody Energy, China’s Shenhua and a Russian-Mongolian consortium mid-September, just two months after they were announced as winners.
Tavan Tolgoi is the second largest mining investment in Mongolia behind the Oyu Tolgoi gold-copper mine being built by giant Rio Tinto and Canada’s Ivanhoe Mines, a project that has also gone through some turmoil.
In October the companies dodged a bullet when the Mongolian government said it was rethinking a 2009 deal that gave Ivanhoe Mines and Rio Tinto a 66% stake in Oyu Tolgoi and that it wanted half of the $6 billion gold and copper project, already more than 70% built.
