Chairman of the Board of Energy Resources LLC J.Odjargal: Since It’s a Major Deposit, We Respect State Policy, Being Patient
Yesterday, on behalf of the Government of Mongolia, Kh.Narankhuu, Minister of Industry and Commerce signed with Energy resources company on the agreement to transfer 96 percent of Tavantolgoi deposit to state ownership. During the event, we got views of Mr. J.Odjargal, Chairman of RGC of the Company.
Could it be beneficial for the company as the state takes 96 percent of Tavantolgoi deposit?
Energy resources company has been keeping the license of Tavantolgoi deposit since 1999 as the property of Mongolia. We have been checking license fees in conformity with laws, taking business risks at the time when coal price was low and the project was inefficient. At this moment when coal price showed positive signs and the project seems to be efficient, we kept the license as the property of Mongolia without seeking any profits and violating any special permission. We didn’t mine any coal and didn’t obtain any profit. However we carried out all necessary researches for investment and projects for instance, primary researches including tentative technical and economic grounds for construction of mining, plants, power plants, railways and electricity lines, digital draft of geographical location details, hydro-geological explorations, research on coal market, environment assessment, mining camp development research, confirmative exploration of coal quality and drilling. Also we estimated that resource might be 7.5 billion, which was 6.4 billion before, via international standards. We negotiated with the Government for three months and solved the matter, respecting interests of the country and for people’s good, without keeping arguments on the subject and with no delay.
How much did Energy resource invest in Tavantolgoi previously? The state position is not to compensate this investment back. And what is your company’s position on it?
According to our researches, we invested MNT 7.8 billion in Tavantolgoi deposit. This number varies if we calculate all researches and business risks but we are not interested in arguing with the Government on it. Since we get the current condition of the state budget, solving the problem through today’s alternative is not the prefect solution. It is most important that it must be implemented and put in the market turnover immediately.
Your company carried out researches on Tavantolgoi. Can we use the deposit without foreign investments?
This project requires a lot of investment, especially investment in infrastructure. There are several opportunities to carry this out. We may attract foreign investment in terms of technology, since Mongolia cannot afford much fund. The Government might decide itself.
This agreement lasted for long, but its result wasn’t so favorable for you.
We thought it was proper to make right and precise decision, respecting state policy since the deposit was a major one.
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