http://m.theaustralian.com.au/OpinionNews/pg/2/fi324247.htmRussia...

http://m.theaustralian.com.au/OpinionNews/pg/2/fi324247.htm

Russians join battle for coal assets

A representative from Russian steel giant Severstal was chatting to a number of Mongolian coal explorers at the Discover Mongolia mining forum in Ulan Bator recently, including Australian-listed Xanadu Mines and Aspire Mining.

Most of Mongolia's expanding coal industry sits along the nation's southern border with China, but both Aspire, capitalised at $297.3 million, and Xanadu, capitalised at $64.4m, have promising exploration acreage along the northern border with Russia.

Severstal doesn't have any existing exposure in Mongolia but it is said to have plenty of cash to put into the right opportunity.

And its entry could have bigger industry implications.

Mongolia's coalminers in the south have been forced to accept heavily discounted prices from Chinese buyers because the Chinese have so far been the only viable customer.

Selling into the Russian market or, better still, using the Russian rail network to transport Mongolian coal to ports on Russia's east coast for export to Korea and Japan would help break China's pricing advantage.

Aspire already has Mongolian coalminer South Gobi Resources and major commodity trader Noble Group on its register. Noble has also taken a major stake in, and struck an exploration joint venture with, Xanadu.