* Tavan Tolgoi CEO quits for "personal reasons"
* Criticised for project delays
* No progress made in financing huge coal project
ULAN BATOR, Oct 11 The head of the state-owned
company charged with developing Mongolia's long-delayed Tavan
Tolgoi coal project in the South Gobi region resigned on
Thursday, raising hopes that a new CEO may hasten the launch of
the massive mine.
Enebish Baasangombo, chief executive of Erdenes-Tavan
Tolgoi, the company responsible for bringing foreign investment
into the mine and listing it overseas, quit because of personal
reasons, he told Reuters.
"After four years of hard work, I am a little bit tired and
needed some rest," he said.
Enebish will be replaced by Batsuur Yaichil, a former member
of parliament with the ruling Democratic Party.
A new chief may help jumpstart the launch of the much
coveted 7.5-billion-tonne coal deposit, situated around 300
kilometres from the Chinese border, which has been repeatedly
delayed as a result of financing problems.
Enebish has been subject to criticism for his failure to get
the project moving and for overspending on mining equipment, an
industry source with ties to the government said on condition of
Plans to raise as much as $3 billion on overseas stock
exchanges, originally scheduled for the first half of this year,
have been postponed until next year.
Another plan to sell mining rights in the project's western
block to foreign investors has also stalled since last year,
when a bid won by China's Shenhua Group Corp Ltd, the
U.S.-based Peabody Energy Corp and a Russian-Mongolian
consortium was branded unfair by Japanese and South Korean
The mine was aiming to produce 15 million tonnes of
high-grade coking coal a year by 2015.
Last week, Erdenes-TT said it would begin exploration of the
western Tsankhi block, which is estimated to hold 888 million
tonnes of proven and probable reserves, but the industry source
close to the government said the launch was little more than a
Enebish was doing whatever he can to save his job, the
Batmunkh Iderkhangai, public relations spokesman with the
company, confirmed on Thursday that work has yet to begin at the
block because no firm has been picked to explore the area.
"We have not selected a company to work with us but we hope
the selection will be made soon," he said.
"It could be Peabody, Mitsui, Shenhua or one of the other
companies but that decision has not been made. There is no set
The change of government following June parliamentary
elections may also have hastened Enebish's departure.
"Given the recent change of political power in Mongolia, the
departure of Enebish is not a surprise," said Nick Cousyn of
local investment firm BDSec.
"We hope the government appoints a replacement who is
capable of getting the Tavan Tolgoi IPO to market in a timely
manner, while balancing the interests of Mongolia and its
Erdenes-TT has struggled to strike a balance between its
dual roles as a coal producer and as a source of revenue for the
cash-strapped Mongolian state.
Earlier this year, Enebish complained at a conference that a
government decision to make the company pay 937 billion tugrik
($669 million) into the country's Human Development Fund had
held back progress.
Falling coal prices, brought about by a slowdown in demand
from China, Mongolia's only customer, have also weighed on the
According to the National Statistical Office of Mongolia,
income from exports dropped 23 percent to $285 million in the
first half compared with a year earlier. Coal comprised 44.6
percent of Mongolia's total exports over the period.