Foreign mining companies are likely to remain involved in developing Mongolia's huge Tavan Tolgoi coal project, in spite of government statements indicating that Ulan Bator would prefer to keep 100 per cent equity ownership.

A spokesman for Sükhbaataryn Batbold, the Mongolian prime minister, yesterday denied a plan to auction 49 per cent of Tavan Tolgoi to foreign investors had been called off. “Plans to privatise Tavan Tolgoi have not been cancelled. We will announce a tender and we will choose which investors are suitable for us. The time of the tender has not been decided yet.”

But the prime minister on Monday made clear he preferred abandoning the auction. He said: “We have not ruled out foreign mining companies having a stake but our preferred option is complete state control.”