“Erdenes Tavantolgoi”, a state owned public company, opened its second mine pit at Tavan Tolgoi deposit and kicked off its operation on the pit on the occasion of “auspicious” date of the Lunar calendar. The company opened its first pit at Eastern block of Tsankhi (East Tsankhi) in 2010 and now, its second pit at the main seam of cocking coal at Western block of Tsankhi (West Tsankhi), is officially open for the operation.
Starting mining operation at West Tsankhi Tavan Tolgoi is under economic realization in whole. This opening has several importance, allowing the implementation of the SGK resolution 40 of 2008, 39 of 2010 on realization of Tavan Tolgoi deposit. It will surely show effect in the budget and employment of the Mongolian economy. “Erdenes Tavantolgoi” company prepared feasibility study of West Tsankhi block and according to JORC reporting standard, it hosts 1.2 billion tons of coal with 65% of high grade cocking coal.
The start of mountain work will allow the company to start mining and export about 1-2 million tons in 2013, leading 20 million tons in 2017. West and East Tsankhi mining operation will allow two world class mine sites under operation, with 40-50 million tons annually.
This action will provide demand of its shareholders, individuals and companies, and the company is planning to go into IPO at MSE, HKSE and LSE within 2013. This event is key one for the preparation of such IPO, with increased evaluation of the company’s asset and opportunity. Also it provides clear and transparency on Tavantolgoi deposit to the foreign investors and eventually, leads increase of share value for the Mongolian citizens and companies.
Moreover, West Tsankhi operation will allow the company to fund its infrastructure and industrialization projects and plan the whole project together with East Tsankhi site, better share price evaluation and increased income to the state budget.
“Erdenes Tavantolgoi” company opened its first mine site in 2010, produced 1 million tons in 2011 and 3.5-4 million tons by the end of 2012. Based on the project capacity, it plans to start construction of 300 Mwt power plant and coal wash plant within this year. It also plans to involve in the railway development project.
Being as subject to the state ownership, “Erdenes Tavantolgoi“ company, together with its head company “Erdenes MGL”, contributed ₮418 billion to the Human Development Fund of Mongolia in 2011-2012, in accordance with the decree of the State Great Khural and Government of Mongolia. This evidence shows that Mongolian people and shareholders are started benefitting from the early development of the project.
West Tsankhi mine site opening and mountain work start was the company level decision of “Erdenes Tavantolgoi” and the terms and conditions of cooperation decision with foreign and domestic investors on Tavan Tolgoi project is the right of the Mongolian Government. There are several alternatives on investment and operation of West Tsankhi mine site and Erdenes Tavantolgoi company considers that the further discussion with strategic investors is welcome and open.