Interview with Stephen Engle from Bloomberg, Ulaanbaatar
Mongolian President Tsakhiagiin Elbegdorj wants to change a proposed gold and copper mining deal with Rio Tinto Group and Ivanhoe Mines Ltd. to give the government cash instead of an equity stake.
Ts.Elbegdorj: We are approaching the final moments to get a good agreement. I would like to say to the foreign investors that do not close the door yet, there are still opportunities and I will try to find common language with our people, with our Parliament and try will push my Government to find win-win proposal.
Stephen Engle: How are you going to do that when the various projects have been long delayed, OT 6 years, TT several years. Many potential investor and partners of yours have been waiting in the sidelines. When will this happen?
A: There are certain issues which cannot be accepted by our people. Of course there are issues that cannot be accepted by our investors. For example, there are issues with the equity sharing and I am not in favour of that. I think government business goes through taxing and equity sharing is not a good proposal. More officials and MPs understand this idea and we are open for discussion.
Q: If you are not open to the 34% equity stake in Oyu Tolgoi, does that mean that agreement is scrapped and you are starting over?
A: I think 34% issue is not very good proposal. The Mongolian Government is seeking foreign investment because we don’t have money and we cannot get those shares without any payment. There is some kind of gridlock.
Q: What is the model that you want to push forward? Would it be obviously tax and take some of the resources as well rather than taking direct equity stake in that project?
A: The model should be made based on best international practises. The Mongolian people, city nor the government do not want to make mistake in this project. This is the first and most important agreement and other project agreement will take example of this. There is no space to make mistake.
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