Melbourne (Platts)--6Feb2012/202 am EST/702 GMT

Australia's Xanadu Mining is looking for buyers for its Mongolian thermal coal assets so it can focus on development of its coking coal, copper and gold opportunities in the region, the company said Monday.

Xanadu plans to sell its Khar Tarvaga and Galshar thermal coal projects, which have a combined JORC resource of around 497 million mt, and is in sale discussions with companies from Indonesia, China and India, the company's chairman Brian Thornton told Platts.

Xanadu's focus will now move to development of its three coking coal assets located in the north of Mongolia. These projects are still at early exploration stage and are 50:50 joint ventures with Noble Group.

"We are trying to simplify the business, allowing us to focus on coking coal and other assets," Thornton said.

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Nuurstel is Xanadu's most advanced coking coal project and is expected to have its JORC resource announced by Q4 2012. Most of the coal produced from Xanadu's coal assets will be sold into China and possibly Russia, Korea and Japan.

"We remain bullish about coking coal over the next five-10 years, as there is very little new coke being discovered," Thornton said. He also expects that coking coal production costs will rise in the Bowen Basin in Australia's state of Queensland as the coal is positioned deep underground and becoming more expensive to mine. Mongolia is an emerging province for coking coal mining.

A railway to move coal from Xanadu's and other projects in the region is likely to be completed within five years, Thornton said.

--Marnie Hobson, marnie_hobson@platts.com

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