The Chinese firm, Chalco, has signed a contract to buy coal extracted from the eastern section of Mongolia’s massive Tavan Tolgoi deposit from state-owned mining company Erdenes Tavan Tolgoi.
The Tavan Tolgoi deposit is estimated to have the largest coal reserves in the world. The deposit’s eastern section is expected to yield an annual 15 million metric tons (mt) or so of coal within the next three to four years. Chalco plans to purchase about 10 million mt, of which it is expected to sell 3 million mt in all to Itochu, Mitsui and a South Korean concern.
The two Japanese trading houses hope to begin supplying the coal to domestic steelmakers as early as this year.