Vale, Xstrata and Rio Tinto are among the companies that have submitted proposals to develop Mongolia’s prized $2 billion Tavan Tolgoi coal mine, according to two people with direct knowledge of the matter.

The Mongolian government has hired Deutsche Bank and JPMorgan Chase to sell as much as a 49 percent stake in what is often called the world’s biggest untapped deposit of coking coal.

BHP Billiton and the coal giant China Shenhua Energy have also bid, according to people with knowledge of the matter, who asked not to be identified because of the sensitive nature of the process, which is at an early stage.

Vale, Xstrata, and Shenhua were not immediately available for comment. BHP and Rio Tinto would not comment.

Tavan Tolgoi, which has a coal reserve of 6.5 billion tons and holds thermal coal, is also drawing bids from consortiums of Japanese, Russian and Korean companies, including energy, commodity and trading companies, one of the people said.

But Shenhua, which analysts long considered the leading bidder because of China’s proximity to Mongolia, may not have front-runner status, the person said.

“It’s not a slam dunk that Shenhua is the party that is going to get that development,” said a Hong Kong investment banker, adding that the Mongolian government was leaning toward an international and diversified player.

The bids have been put forward in different forms – some in detailed development proposals, others in one-page expressions of interest, the investment banker said.

“Basically, good quality hard coking coal is quite a scarce commodity in the long term, and such large assets are hard to come by,” said Malcolm Southwood, an analyst at Goldman Sachs in Melbourne, “so companies with a long-term view on coal could find the assets attractive.”

A supply crunch last year helped more than double the price of hard coking coal, which is used in the metals sector, to $300 a ton as steel makers across the globe gobbled up huge quantities in an economic boom.

Prices have since collapsed as demand from steel mills has slumped, but some analysts said the long-term outlook for prices of hard coking coal was still robust.

Reports have named a range of potential bidders, including Itochu Corporation of Japan and Peabody. But the process has been plagued by setbacks as Mongolia clarifies its mining laws, and no timetable for development has been confirmed.

“It’s a fabulous asset, and that will present a great opportunity to whoever is the successful bidder,” said Andrew Driscoll, head of resources research at CLSA. “Certainly, we’d love to see that put into motion as soon as possible, but I’m not holding my breath.”

The 2006 version of the law allowed the state a share of as much as 34 percent of deposits found with private funds and as much as 50 percent of those discovered with state funds. Mongolia has since delayed revising its minerals law.

BHP originally won the right to develop Tavan Tolgoi in the 1990s but found it to be uneconomical at the time and returned the license to Mongolia.

The successful sale of Tavan Tolgoi could hand Mongolia – where annual per-capita income is only about $1,200 – $2 billion, plus continuing revenue from its majority stake in the mine.

Rio Tinto, which struck an investment deal last week worth nearly $20 billion with the Chinese state-owned aluminum producer Chinalco, already has a joint project in Mongolia with Ivanhoe Mines of Canada: the Oyu Tolgoi copper and gold deposit.

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