bhp drops bid for world's largest coal deposit

From www.businessspectator.com.au

By a staff reporter

BHP Billiton has withdrawn its bid for part of Mongolia's massive Tavan Tolgoi coking coal mine, which is valued at $US2 billion ($A3.05 billion), according to reports from a UlaanBaatar daily newspaper, Onoodor.

Withdrawing from the investment would mean the miner would miss out on the historic deal that would have allowed a private company to access around 50 per cent of what is often referred to as the world's largest untapped coal reserve.

BHP spokeswoman Samantha Evans declined to comment on the reports.

The miner on Wednesday announced it would shut down its Ravensthorpe nickel mine and slash 6,000 jobs worldwide.

Mongolia's government is aiming to offload 49 per cent of Tavan Tolgoi for around $US1 billion, with the remaining 51 per cent staying under state control.

The deposit is estimated to have 6.5 billion tonnes of high-grade coking and thermal coal and is located 130 kilometres northwest of Ivanhoe Mines' Oyu Tolgoi site.

According to reports out of UlaanBaatar, delegates from America's Peabody Energy flew into the Mongolian capital just last week after BHP Billiton pulled out of the bidding process.

In the 1990s BHP Billiton won the rights to Tavan Tolgoi, but subsequently returned the licence to Mongolia after the company found that at that particular time the mine's development was uneconomical.