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CEO of long-delayed giant Mongolian coal project quits

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* Tavan Tolgoi CEO quits for "personal reasons"

* Criticised for project delays

* No progress made in financing huge coal project

ULAN BATOR, Oct 11 (Reuters) - The head of the state-ownedcompany charged with developing Mongolia's long-delayed TavanTolgoi coal project in the South Gobi region resigned onThursday, raising hopes that a new CEO may hasten the launch ofthe massive mine.

Enebish Baasangombo, chief executive of Erdenes-TavanTolgoi, the company responsible for bringing foreign investmentinto the mine and listing it overseas, quit because of personalreasons, he told Reuters.

"After four years of hard work, I am a little bit tired andneeded some rest," he said.

Enebish will be replaced by Batsuur Yaichil, a former memberof parliament with the ruling Democratic Party.

A new chief may help jumpstart the launch of the muchcoveted 7.5-billion-tonne coal deposit, situated around 300kilometres from the Chinese border, which has been repeatedlydelayed as a result of financing problems.

Enebish has been subject to criticism for his failure to getthe project moving and for overspending on mining equipment, anindustry source with ties to the government said on condition ofanonymity.

Plans to raise as much as $3 billion on overseas stockexchanges, originally scheduled for the first half of this year,have been postponed until next year.

Another plan to sell mining rights in the project's westernblock to foreign investors has also stalled since last year,when a bid won by China's Shenhua Group Corp Ltd , theU.S.-based Peabody Energy Corp and a Russian-Mongolianconsortium was branded unfair by Japanese and South Koreanrivals.

The mine was aiming to produce 15 million tonnes ofhigh-grade coking coal a year by 2015.

MEDIA STUNT

Last week, Erdenes-TT said it would begin exploration of thewestern Tsankhi block, which is estimated to hold 888 milliontonnes of proven and probable reserves, but the industry sourceclose to the government said the launch was little more than amedia stunt.

Enebish was doing whatever he can to save his job, thesource said.

Batmunkh Iderkhangai, public relations spokesman with thecompany, confirmed on Thursday that work has yet to begin at theblock because no firm has been picked to explore the area.

"We have not selected a company to work with us but we hopethe selection will be made soon," he said.

"It could be Peabody, Mitsui, Shenhua or one of the othercompanies but that decision has not been made. There is no settimeframe."

The change of government following June parliamentaryelections may also have hastened Enebish's departure.

"Given the recent change of political power in Mongolia, thedeparture of Enebish is not a surprise," said Nick Cousyn oflocal investment firm BDSec.

"We hope the government appoints a replacement who iscapable of getting the Tavan Tolgoi IPO to market in a timelymanner, while balancing the interests of Mongolia and itsforeign partners."

Erdenes-TT has struggled to strike a balance between itsdual roles as a coal producer and as a source of revenue for thecash-strapped Mongolian state.

Earlier this year, Enebish complained at a conference that agovernment decision to make the company pay 937 billion tugrik($669 million) into the country's Human Development Fund hadheld back progress.

Falling coal prices, brought about by a slowdown in demandfrom China, Mongolia's only customer, have also weighed on thecompany's outlook.

According to the National Statistical Office of Mongolia,income from exports dropped 23 percent to $285 million in thefirst half compared with a year earlier. Coal comprised 44.6percent of Mongolia's total exports over the period.

(Reporting by Michael Kohn and Terrence Edwards; Editing byDavid Stanway and Ryan Woo)

((david.stanway@thomsonreuters.com)(+86 10 6627 1289)(ReutersMessaging: david.stanway.reuters.com@reuters.net))

Keywords: MONGOLIA TAVANTOLGOI/RESIGNATION

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