June 21, 2012 / 6:02 AM / in 8 years

Mongolia open to foreign investments in Tavan Tolgoi: President

ULAN BATOR (Reuters) - Mongolia is still open to foreign investments in the western block of the giant Tavan Tolgoi coal mine and has not yet decided on whether to go alone on developing its prized asset, President Tsakhia Elbegdorj said.

Talks with foreign groups to develop Tavan Tolgoi have hit a snag since July last year after the government withdrew a decision to hand mining rights to a consortium comprising China’s Shenhua Group (1088.HK), U.S.-based Peabody (BTU.N) and a Russian-Mongolian group headed by Russian Railways.

An executive with the state-owned firm in charge of the Tavan Tolgoi project said in April that Mongolia might develop the mine on its own.

“I think in balancing investors, it is essential that it is in line with policies and in line with our national security,” Elbegdorj told Reuters in an interview on Thursday.

“We have two big neighbors and we need investment. I think the door is still open in the negotiations with big national investors.”

Speaking at his office in Mongolia’s Government House, Elbegdorj also said it was crucial for the country’s tiny economy to diversify away from mining.

The government will boost foreign investments in other sectors such as agriculture, food and tourism, he said.

“The Mongolian economy mostly has one color, and we would like to make this a rainbow economy. I have a message to our investors - don’t see Mongolia as only mines. There are great opportunities in investing in other sectors.”

Mongolia’s $10 billion economy is at the beginning of a mining boom and foreign investors have rushed in on hopes of cashing in on the country’s huge deposits of copper, gold, coal and uranium.

Elbegdorj said the biggest challenge for the next government was the fight against corruption.

He said the recent arrest on corruption charges of his predecessor, Nambaryn Enkhbayar, should be welcomed by foreign investors because it proved that Mongolia was committed to improving the rule of law.

Writing by Fayen Wong; Editing by Ryan Woo

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