Mongolia Business and Mongolian Daily Business News

The working group, established under the Prime Minister’s resolution, is negotiating with joint team of Ivanhoe Mines and Rio Tinto on Oyu Tolgoi copper and gold project. Working group hasn’t reached any deal yet. But the joint team of two companies presented its proposal, accepting 34% of the Mongolian side ownership and dividend issue, but rejecting our intention of further acquisition up to 50% and windfall tax of 68%. Also it stated that it will discuss the issue of pre-payment after settling the general principle of the agreement.

Minister D.Zorigt has few words to make it clear.

Q: What is the recent development of making the investment agreement on “two toilgois”?
D.Zorigt: It is in its final phase. But it is unnecessary to reveal its details thourhg media when the issue is not settled yet.

Q: Civil movements opposed the closed deal making. Why it can’t be transparent?
D.Zorigt: The deal making started with our strong and solid position. First responses are coming to us. We reached 50% of the most common consent on principal issues. Negotiation continues.

Q: Is it true that Ivanhoe Mines proposed 34% to Mongolia?
D.Zorigt: First of all, I should say that negotiation is underwent the difficult environment. But both sides haven’t reached final conclusion. Our side is expressed its interest of owning 50% instead of 34%. Therefore, I can’t inform you much more on it. The issue is under negotiation.

Q: Government has challenge to update the negotiation making procedure to the State Great Khural. Can it manage to conclude the agreement before it?
D.Zorigt: It will propose within the given time. It will update what is the situation look like. Last week, it presented its first introduction of negotiation making to the Cabinet Meeting.

Q: How many companies expressed their interest of investment?
D.Zorigt: Negotiating with joint team of Ivanhoe Mines and Rio Tinto on Oyu Tolgoi. As for Tavan Tolgoi, consortium of 11 South Korean companies, led by “KOREC”, consortium of three Ruessian companies, Peabody from USA, Shenhua Energy from China, Mitsui, Itochu and Sojits (Marubeni, Sumitomo), Jindal Steel and Power from India, Vale from Brazil are presented their letter of interest. The working group is closely examining their interest and it will be advised with the consulting companies.

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