BHP, Peabody: Mongolian Hope Fades - TheStreet

NEW YORK (

TheStreet

) -- The Mongolia government says it would prefer to keep a key coking coal asset under state control, potentially ruling out a number of bidders, according to the

Wall Street Journal.

The Tavan Tolgoi asset had attracted large bidders, including

BHP Billiton

(BHP) - Get Report

,

Vale SA

(VALE) - Get Report

and

Peabody Energy

(BTU) - Get Report

, as well as India's

Jindal

and

China Shenhua Energy.

The Mongolian government said the ownership and investment of other big mining assets will be decided on a case-by-case basis.

The $2 billion Tavan Tolgoi deposit is situated in Mongolia's South Gobi desert and has coking coal reserves of roughly 6.5 billion metric tons.

Scores of the world's mining heavyweights have become fixated on developing the largely untapped mineral reserves of Mongolia. The country possesses some of the largest reserves in the world.

To the envy of many, in December,

Ivanhoe Mines

(IVN)

said it and

Rio Tinto

(RTP)

had received the green light to spend $758 million next year to develop their joint copper and gold-mining project in Mongolia.

Ivanhoe's CEO said he expected the initial open-pit mine to be completed in 2012 and for commercial production to begin in 2013. The Oyu Tolgoi mine could produce more than 1 billion pounds of copper and 500,000 ounces of gold a year in the first decade of production.

-- Reported by Andrea Tse in New York

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