U.S. miner Peabody Energy , a venture between China's Shenhua <1088.HK> and Japan's Mitsui & Co <8031.T> and a Russian-led consortium have been picked as preliminary winners to jointly develop the prized Tavan Tolgoi coal deposit, a senior Mongolian government source said on Monday.
Last week, the government said it had halved the shortlist of bidders to three from six, but it did not say if it would cut the list further as final winners.
They are the preliminary winners and all the negotiation materials have already been submitted to the parliament for discussion, the official from Mongolia's Resources and Energy Ministry told Reuters by telephone.
It only needs an approval from the parliament ... the intention is to have all three parties jointly develop Tavan Tolgoi.
Members of the Japanese-Korean-Russian consortium include POSCO <005490.KS>, utility firm KEPCO <015760.KS>, trading firm LG Corp and Daewoo International, state-owned Russian Railways and Japanese trading houses Itochu Corp <8001.T>, Sumitomo Corp <8053.T>, Marubeni Corp <8002.T> and Sojitz Corp <2768.T>.
Analysts said the combination makes sense as both the Shenhua-Mitsui venture and the Russian-Korean-Japanese consortium lack the experience to develop coking coal deposits.
The selection of bidders is not a surprise to us. Mongolia is trying to balance the geopolitical influence of neighbouring countries: not becoming over-dependent on China and seeking export markets in Russia, Korea and Japan, said UOB-Kay Hian's senior metals analyst Helen Lau.
Should the decision be finalised, it would grant these 12 firms much coveted access to the world's biggest untapped coking coal deposit, with the west Tsanki block holding an estimated 1.2 billion tonnes of reserves and a forecast production life of more than 30 years at 15 million tonnes a year.
The jostling for the right to develop the Tsanki block has been a stiff battle among some of the world's mining titans, which also includes Vale and Xstrata .
(Reporting by Fayen Wong; Editing by Jacqueline Wong)