Mongolia Business and Mongolian Daily Business News

“Mining and geology can’t be separated. But the Government paid much attention on mining sector, ignoring geology one” concluded participants of “The Mongolian Geology and Mineral Forum”. Representatives of 42 companies and scholars attended the Forum, jointly organized by the Ministry of Mineral Resources and Energy, Mineral resource Authority, The Mongolian Mining Geology Association, The Mongolian Geologists’ Association, The National University of Mongolia and Geology School of University of Science. During the forum the legal environment of mining sector was fiercely criticized by the participants. Read the rest of this entry »

6 months after signing of Oyu Tolgoi IA, the Government has held a hearing on the investment agreement implementation. 12 compulsory tasks were planned, but issues such as feasibility study, independent auditing, tax proof, Board of Directors and article of association of company are under implementation process.

For example, international independent auditing, a German branch of PricewaterhouseCoopers, has been working on the Oyu Tolgoi project and it will be completed within March. General Authority of Taxation is in charge of expense of the investors, tax redemption issues and a working group with 5 members is conducting inspection at Oyu Tolgoi LLC. Read the rest of this entry »

Prime Minister S.Batbold informed that Mongolia will pursue policy to own Tavan Tolgoi deposit 100%. Faith of Tavan Tolgoi is set to be decided during the spring session of SGK.

After this notice, there was fear of who would be interested in Tavan Tolgoi deposit accepting an operator’s status. The government said that interested bidders will not own share or equity of the deposit, but they will pay the payment for mining. But Minister D.Zorigt is confident that interested parties would be interested in the project, because such deals are common in the mining world. Read the rest of this entry »

Proceeds to be used by Ivanhoe to acquire critical mining and milling equipment for the Oyu Tolgoi copper-gold complex in Mongolia

LONDON, ENGLAND — Robert Friedland, Executive Chairman of Ivanhoe Mines, and John Macken, President and Chief Executive Officer, announced today that the company has entered into an agreement to issue 15 million common shares to Rio Tinto at CDN$16.31 per share, for net proceeds of CDN$244.7 million (US$232.4 million*).

Ivanhoe Mines will use the proceeds to purchase from Rio Tinto key mining and milling equipment to be installed during the construction of the Oyu Tolgoi copper-gold mining complex in Mongolia.

The equipment includes principal components for the 100,000-tonne-per-day Oyu Tolgoi phase-one copper-gold concentrator, including two large, 38-foot-diameter, semi-autogenous grinding (SAG) mills, four ball mills, re-grind mills, crushers, motors, gearless drives, conveyors and flotation cells. Also included is the hoist and major components for the sinking of Shaft #2 — the 10-metre-diameter, main production shaft for the underground block-cave mine at the Hugo North Deposit. Read the rest of this entry »

Many people are interested in Oyu Tolgoi project effect in the market and economy. The Investment Agreement assures direct payment and cash injection from OT investors into the Mongolian economy and public also received ₮70K right before the Lunar New Year. This distribution was a long awaited one for the mass, but those who contribute tax and revenue to the state, are suffering its cost; inflation.

Business sector of the Mongolian community wanted to provide and supply services and products that can be produced in Mongolia. According to the shareholders’ agreement, if the proposed services or products, existing in or originated from Mongolia offered by the Mongolian companies fully meet the requirement, Oyu Tolgoi LLC will prioritize it. Also local companies of Umnugobi aimag will be considered first.

Read the rest of this entry »

Nuclear Energy Law implementation and enforcement is not satisfactory. The Cabinet Meeting discussed the enforcement and implementation of the Nuclear Energy Law of Mongolia, during the irregular meeting of Cabinet Ministers. Uranium license holding foreign companies raised notable fund from the foreign capital market. According to the Nuclear Energy Law, if uranium deposit license holder transfers its 5 or more percent of total share, it shall seek approval from the Nuclear Energy Authority.

“…the Government decides to advertise the related laws to the public in order to raise awareness. Because it is important that the mining companies to know that if any uranium license holding companies try to transfer its equity of 5 or more percent, they should seek approval from the Nuclear Energy Authority…” it said in its report.

The Mineral Wealth Council of Mongolia held meeting on “Toson Uul – XIX” oil field in Tamsag basin of Dornod aimag and approved its reserve.

“Upon this approval experimental oil production is converted into official and Mongolia has become oil producing country.” said Mr. D.Amarsaikhan, Head of the Oil Authority of Mongolia. “The proven reserve of the field is 199,2 million ton”, he said. Read the rest of this entry »

A working group established by the Security and Foreign Policy Standing Committee of SGK has concluded its examination on Mardai group deposits. MP Z.Enkhbold, Chairman of the Committee, held press conference.

Q: Was illegal issuance of licenses revealed during the examination?

MP Z.Enkhbold: Uranium deposits located in the territory of Bayandun, Gurvanzagal and Dashbalbar soums of Dornodn aimag were explored between 1971-1974 and “Uranium exploitation Agreement in the Mongolian territory” was made between the Government of Mongolia and Soviet Union in December 23 1981. It mined 510.6 thousand tons of ore between 1988 – 1995.

But MRA issued mining and exploration licenses to “Emeelt Mines”, “Western Prospector Mongolia”, “Adamas Mining” companies in the previously mined areas, breaching provision 2.3 of article 17 and provision 1.4 of article 19 of the Mineral Law of Mongolia. It is illegal to issue exploration license in the previously mined areas. After Agreement of Concession was annulled in late 1989 and early 1990, all uranium properties returned to Mongolia. I would like to quote two examples to give you how big scale of work were underwent in the above – mentioned areas; over 40 kilometers of railway to transport small carriers was laid and three horizontal shafts were built. After the Agreement with Russia was annulled, all reports, findings, locations of ore, electrical supply lines and over 130 kilometers long railway was transferred to the Mongolian side free. Over 14 licenses were issued to 4 companies in the previously mined areas. It is much similar to issue an exploration license in the mining area of Erdenet copper and molybdenum mine and then to raise fund at the Canadian Stock Exchange. Read the rest of this entry »

photo courtesy of gogo.mn

Q: Feasibility study of OT deposit was rejected by the Mineral Wealth Council of Mongolia. What was the main reason of rejection?

Minister D.Zorigt: Professionals and experts made comments during the hearing and meeting of the Mineral Wealth Council of Mongolia. Also they put several questions from investors. Upon receipt of the response the approval will be discussed. Working group met with investors regarding the above-mentioned questions on February 5 2010. Investors’ side promised to give detailed explanation on the questions .

Q: It said that total capital investment size increased in the feasibility study by $1 billion. What is your opinion?

Minister D.Zorigt: Initial investment size hasn’t increased. It’s all investment is made according to the investment agreement.

Q: Upon signature of the agreement, the Government will receive $250 million as pre-paid loan. When the second funding will be made? Read the rest of this entry »

Yesterday, progress of Oyu Tolgoi project was reviewed during the government meeting. D.Zorigt, Minister for Mineral Resources and Energy said 7 of the 12 issues to be resolved in the six months before implementation begins have been resolved. The certain points were raised by the Professional Council of Minerals and the working group sought clarification from the investors. Reply from the investors is expected soon. Internationally recognized organisation will carry audit inspection. Tax exemption claims are being assessed by the Tax Authority and the work should be finished within February says the officials.