The Wall Street Journal states that Erdenes TT is seeking to negotiate with China’s biggest coal producer Shenhua Energy according to the Mongolian Ambassador to Beijing Ts.Sukhbaatar.
Shenhua Energy is one of the bidders for he West Tsankhi of Tavantolgoi, a strategic mine.
Erdenes TT supplied coal to China under a 250 million US dollar coal-supply deal with the Chinese Aluminum Corporation of China Ltd but coal export was stopped due to financial restraints and a falling of coal prices.
Ambassador Sukhbaatar stated that Chalco has forced the Mongolian Government to make an unacceptable suggestion during a hard time of financial difficulties.
He said that “Erdenes TT has paid two thirds of the 250 million US Dollar debt for Chalco. But now Erdenes TT wants to review the agreement terms so the coal price is changed due to market price.
Coal prices fell to 53 US dollars causing the company to suffer great losses and failed to pay the Altangobi transportation company.
Now we seek a negotiation with Shenhua. Shenhua is China’s biggest coal producer which has a good coal transportation infrastructure and operates internationally.
But it is still too early to tell how the negotiation will go with Shenhua.”
The Chinese giant Shenhua Energy has not made a statement to media while Chalco urged Erdenes TT LLC to honor the terms of the $250 million supply agreement, particularly the secret terms via email.