Mongolia Energy Corporation Limited (HKG:0276) announced that MoEnCo LLC, an indirect wholly-owned operating subsidiary of the company in Mongolia, received a “first” notice yesterday from Leighton, the mining contractor responsible for coal extraction at the Khushuut Coal Mine, whereby Leighton is demanding payment of the outstanding contractor’s fees, together with a notice of suspension of the works at the Khushuut Coal Mine by Leighton.
Leighton also stipulated in the notice that if MoEnCo LLC does not settle the outstanding contractor’s fees within 28 days, Leighton will terminate the relevant mining agreement.
According to the notices, Leighton demands payment to be made by MoEnCo LLC within 28 days for the sum of MNT16.962 billion (approximately US$12.212 million) as alleged by Leighton to be outstanding and due by MoEnCo LLC which the company and MoEnCo LLC dispute. The company is currently in negotiation with Leighton and will continue to do so to ascertain whether the parties can reach an amicable settlement.
Additionally, the company’s technical operation team will prepare themselves to extend their current works either by themselves or through other contractors to take over such of the works currently undertaken by Leighton in the event that an amicable settlement cannot be reached with Leighton or if the mining agreement is terminated by Leighton or otherwise.