The Government of Mongolia is negotiating with Energy Resources consortium, which owns 100 percent Tavan tolgoi deposit license however it’s been informed recently that the Government is taking the deposit 100 percent into state ownership, leaving nothing for national investors. Therefore, we clarified some information from J.Odjargal, Chairman of the Governing Council of the consortium.
In which phase is Tavan tolgoi agreement now?
It is proper to mention that the agreement commenced in a business atmosphere and with will of mutual understanding. The agreement negotiation lasted for summer and fall with the Cabinet of M.Enkhbold and for winter with S.Bayar’s Cabinet in 2007. In terms of period, the negotiation lasted for 4 seasons and is still goes on. Of course it did not undergo a smooth and direct path, for example about 10 meetings had been held in framework of negotiation with S.Bayar’s Cabinet. We assumed that the negotiation would be held in a mutually beneficial way that highlighted mutual understanding to bring the project into economic turnover. But recently not so clear atmosphere dominate.
The negotiation started again because the Government refused to accept the ownership of the state as 86 percent and Energy Resource as 14 percent. It means the state forces to take 100 percent ownership, isn’t it?
The significance of the negotiation lies in tying the positions of parties in a single knot. Thus, it is normal if a one party expresses its opinion, preserving the position. Therefore, it is inappropriate to say “forcing”. However it must be within a particular standard. It was clear from the first time that there would be opposing opinions since 86/14 ratio raises the issue of ownership. Energy Resource consortium is doing its best for solving the issue amiably, by giving priorities to the national interests. We believe that opposing opinions would not adversely affect the general atmosphere of the negotiation. One may get that difficulties were overcome by mutual efforts because the negotiation is not blocked and is still in progress.
According to latest news headlines, the state would take the deposit from the consortium without paying compensation, however an alternative of giving particular land could be discussed and the land would be given not from Tavan tolgoi. Will you accept this proposal?
Companies, joined the consortium, planned and aimed to take parts in using Tavan tolgoi and raise funds for such a big production. It took several years but not one for planning. It would be regretful to stop this planning, research and execution. We are being as patient as we could be, understanding that the state is incapable of paying money for licenses. If the state won’t share the deposit 86/14 ratio and won’t pay any money for licenses, the remaining part takes particular land. Thus negotiation is on leaving particular land for the consortium, but the task group told us no land would be given to us from Tavan tolgoi. In this case we have no alternatives other than taking 3 parts of land in the vicinity of the deposit. We can’t give up more than this.
Does Energy resource consortium still own the deposit? You have proposed 50:36:14 to the state but it didn’t accept it. And now it says no land and no allowances would be given to Tavan tolgoi deposit. So what are going to do?
We are trying not to exacerbate the issue. This is the last alternative and we told the task group of the Government that we had no way to go back. Observing how the efforts and contribution of the Consortium that preserved Tavan tolgoi would be assessed and evaluated, we are making our proposals.
Due to timing, is there any factor i.e. politics affecting the negotiation?
Both parties have abundant desire to finish the negotiation without delay, though we need time for making the issue clearer and finalizing it without any disputes. We understand well that there is a long-awaited expectation among the public. National investors are, too, interested in using Tavan tolgoi deposit and allocate its efficiency properly to the public. Therefore, politics is not what we are interested in.