Tavan Tolgoi (Mongolian: Таван толгой, also Tavantolgoi, Tavantolgoy, "Five Hill") is one of the world's largest untapped coking and thermal coal deposits, located in the Ömnögovi Province in southern Mongolia.^[1] It has a total estimated resource of 6.4 billion tonnes, one quarter of which is high quality coking coal. It is divided into six sections: Tsankhi, Ukhaa Khudag, Bor tolgoi, Borteeg, and Southwest and Eastern coalfields.^[2] The Tsankhi section is the largest part, and is divided into East and West Tsankhi - these have had the most focus recently.

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Tavan Tolgoi

Location
Tavan Tolgoi
Location	Tsogttsetsii sum
Aimag	Ömnögovi
Country	Mongolia
Coordinates	43°37′30″N 105°28′27″E
Production
Products	Coking coal
Owner
Company	Erdenes MGL

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All of Tavan Tolgoi is owned by Erdenes MGL (a government owned company) except for Ukhaa Khudag section which is mined by the Mongolian Mining Corporation.^[3] Erdenes Tavan Tolgoi JSC (Erdenes TT), a subsidiary of Erdenes MGL, is managing the development of East Tsankhi, and the company is due to float on the Hong Kong, London and Ulaanbaatar stock markets in late 2012.^[4] Mining of West Tsankhi is planned to be contracted to a consortium of international mining companies – a decision is due in late 2012.^[5]

Tavan Tolgoi is situated in the southern Gobi Desert. Tavan Tolgoi is 15 km SW from Tsogttsetsii sum center, 98 km E from Ömnögovi Province center Dalandzadgad. It is 150 km from Oyu Tolgoi and about 240 km north of the Chinese border.

The Tavan Talgoi deposit was discovered by a Soviet exploration team that included the first Mongolian geologist Jaltsavyn Dugersuren in 1945, and exploratory drilling and feasibility studies continued until 1985.^[6] After Mongolia's democratic transition in 1990/91, the government allowed foreign companies to explore the deposit. BHP gained the exploratory rights in the early 1990s; however, they relinquished the rights in the mid-1990s because of financial concerns.^[7][8] In 2006, the government awarded Energy Resources LLC the mining license over the Ukhaa Khudag section (license MV-11952).^[9] The government also amended the Minerals Law in 2006 and identified 15 strategic deposits (allowing the government greater ownership of mines), of which Tavan Tolgoi was one.^[10]

In 2007, the government decided to review the ownership and investment rights over Tavan Tolgoi, and the prime minister (Bayar Sanjaa) proposed to renationalise the deposit - the government would gain 50%, Energy Resources keeping 14% and other investors the remaining 36%.^[11] Erdenes MGL LLC was formed as a wholly government-owned company in 2007, and later that year the government renationalised Tavan Tolgoi, leaving Energy Resources with the Ukhaa Khudag section.^[12] The government began negotiations in 2009 with mining companies to give them a 48% stake in Tavan Tolgoi. BHP was initially interested in, but in early 2009 withdrew its bid.^[13] After this, Peabody Energy (an American mining company) reportedly approached the government interested in the deposit.^[13]

In 2010, the Erdenes MGL LLC formed a new company - Erdenes Tavan Tolgoi - which would hold the licenses and manage the Tavan Tolgoi deposit. In July 2010 it was reported that the government had decided to sell 30% of Erdenes TT, keep 40%, give 10% to Mongolian citizens and 20% to Mongolian companies.^[14] However, in 2011 the government announced plans for an IPO of 29% of Erdenes TT, and to continue to give 10% of the shares to citizens and reduce from 20% to 10% the amount given to Mongolian companies, with the government to hold the remaining 51%.^[10] The money raised from the IPO would be used to fund the development of East Tsankhi, while West Tsankhi would be sold to a mining consortia.