Dec 3 (Reuters) - Mongolia has relaunched an international tender to develop its giant Tavan Tolgoi coal project as it tries to boost a flagging economy hit by falling commodity prices and a decline in foreign investment.

The latest attempt has drawn interest from Hong-Kong listed Mongolia Mining Corp (MMC), U.S.-based Peabody Energy Corp and Japan's Itochu Corp, despite weak global coal prices.

Tavan Tolgoi holds around 7.5 billion tonnes of coking coal, but Mongolia's cash-strapped government has struggled to finance its development, and little progress has been made since an international bidding process collapsed in 2011.

The Mongolian Mining Corp (MMC) said on Monday that it has formed a consortium with "certain independent parties" to submit a bid for the project, located around 300 kilometres (186 miles) from the Chinese border.

Interested firms had to notify the Mongolian government of their intention to bid for the block before a Dec. 1 deadline, with a shortlist expected to be released by Dec. 15, MMC said.

The firm declined to give further details of its bid, when contacted by Reuters.

Erdenes Tavan Tolgoi, the state-owned entity in charge of the project, did not immediately respond to requests for comment.

In 2011, the western block of the project was awarded to a consortium consisting of Peabody, a team of Russian and Mongolian firms, and the Shenhua Group, China's biggest coal producer, but the result was annulled after rival bidders from Japan and South Korea branded the decision unfair.

Peabody spokesman Chris Curran, said the firm would be "an active participant" in the current tender.

Itochu, which submitted a joint bid with Sumitomo, Marubeni and Sojitz in 2011, said it had also notified Mongolia that it was interested in getting involved.

South Korea's Daewoo International and LG International, both part of a consortium bid in 2011, said they would not participate.

China's Shenhua was not available for comment.

Along with the Oyu Tolgoi copper mine, run by Rio Tinto , Tavan Tolgoi is seen as crucial to Mongolia's efforts to convert its mineral wealth into economic gains, but both have been caught up in a debate about the role of foreign firms in the country's development.

Mongolia's new prime minister Chimed Saikhanbileg has identified Tavan Tolgoi as a priority to energise the country's flagging economy.

"It's one of a handful of key projects ... that has to be completed during the six-month honeymoon for the prime minister to restore confidence in the Mongolian economy from a global perspective," said Jim Dwyer, executive director of the Business Council of Mongolia.

(Reporting by Terrence Edwards and David Stanway in BEIJING, Osamu Tsukimori and Aaron Sheldrick in TOKYO, Meeyoung Cho in SEOUL, Sonali Paul in MELBOURNE)