Tavan Tolgoi, located in the Gobi desert about 250 kilometres (155 miles) from the Chinese border, is one of the world’s largest coking coal mines, but it has not yet fulfilled its massive potential.

Development has been held back by financing and infrastructure challenges, as well as political disputes over the role played by foreign investors in Mongolia’s economy.

Gankhuyag Battulga, chief executive of the state-owned Erdenes Tavan Tolgoi JSC in charge of the project, told a press briefing that rising revenues and production could finally kickstart the mine’s expansion.

The project exported 6.9 million tonnes of coal in the first six months of the year, up 28 percent compared to the same period in 2017, while net profits increased 31 percent from the same period a year ago to reach 373.3 billion tugrik ($151.75 million).

“The increase in revenues allow us to finance some parts of the project,” said Gankhuyag, adding that the company has also restarted exploration after a long suspension, a move that could raise estimated reserves and overall market value.

The improvement in Tavan Tolgoi’s fortunes follows a resolution that Mongolia’s parliament passed to raise funds for the further development of the project on overseas stock exchanges.

Analysts said Tavan Tolgoi still needs to overcome the severe infrastructure problems in the remote south Gobi region, including the construction of a rail link to China, Mongolia’s main export market.

“Being profitable is only the first step. The railway issue is obviously the main hurdle to a successful IPO,” said Munkhdul Badral Bontoi, chief executive of Mongolia-based market intelligence group Cover Mongolia. ($1 = 2,460 tugrik) (Reporting by Munkhchimeg Davaasharav; Editing by David Stanway and Christian Schmollinger)