A group led by China Shenhua Energy Co Ltd will own a 40 percent stake in the western Tsankhi block of Mongolia's Tavan Tolgoi coal project, two sources with direct knowledge of the deal told Reuters on Tuesday.

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A Russian-led consortium would control another 36 percent of the project, while US miner Peabody Energy Corp would own the remaining 24 percent, according to a draft proposal to be submitted to the Mongolian parliament on Wednesday, the two Mongolian government sources said.