Trafigura, one of the world’s top oil and commodity traders and Origo Partners Plc, one of the largest private equity investors in Mongolian natural resources have formed a 50:50 joint venture to develop Mongolian coal and iron ore deposits with significant export potential.
Trafigura-Origo MGL will invest in a number of already identified Mongolian iron ore and coal exploration projects and target further high-grade deposits, the companies said on Monday in a joint announcement.
The partners will also look at expanding the scope of the venture into other countries in the region such as Kazakhstan and Russia and to cover all commodities.
The joint venture will be jointly managed by Luke Leslie, Head of Mongolia and Mining Investments at Origo and Mikhail Zeldovich, Head of Russia/CIS and Mongolia at Trafigura.
The Company’s Board will also include Chris Rynning, CEO of Origo and Chris Cox, a Director at Trafigura.
Trafigura is a relative newcomer to the coal market. Since the company hired senior traders from Noble Group (NOBG.SI), one of the biggest physical coal traders, two years ago it has grown its thermal and coking coal business in both the Atlantic and Pacific markets.
Beijing-based Origo is an AIM-listed private equity investor and fund manager which provides its shareholders with exposure to China-linked high-growth investment opportunities.
Origo has a wholly-owned Mongolian subsidiary in Ulan Bator which invests in and operates Mongolian assets and a portfolio of investments in the country that includes investments in Kincora Copper, Gobi Coal & Energy, Voyager Resources and Moly World Limited.
“The Joint Venture represents an excellent opportunity to further strengthen our involvement in Mongolia. It also helps us to maintain our position as a leading player in the global commodities business,” Trafigura’s Cox said.