Minister D.Zorigt: The main version is ready to submit to the discussion

Jun 30 • Government, Mining • 610 Views • 6 Comments on Minister D.Zorigt: The main version is ready to submit to the discussion

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Yesterday, MPRP group at SGK held meeting and during this meeting, Minister D.Zorigt made disclosure regarding the current development on OT agreement.

Q: You presented the comments and findings of the Standing Committee on Economy to MPRP group members. What were the comments and reactions of the party group members?

Minister D.Zorigt: In accordance with the comments and findings of the Committee, the signing sides are added. Ivanhoe Mines Inc Co.,Ltd was sole signing side before, but the signing sides are added with Rio Tinto International Holding and Ivanhoe Mines Canada. Also the term of building investment is set at two years, because of the criticism from MPs on raising fund length. Moreover, the clause is added that within five years of time after the raising fund, the factory must be built and operate in its full capacity.

Q: The issues of Energy, Roads and Transportation were unclear. What will be the answer?

Minister D.Zorigt: As for the energy issue, it is true that Mongolia has no resource to provide with even it is stated that the Mongolian side will provide energy after the realization of the project. Also there was criticism in relationship with this issue. Therefore, we added three more resources. Alternatively, the investor side is to build power station within four years or to receive energy from third source. Also another clause is added central power network would provide the energy.

As for the roads, there was the critisizm that Mongolia will take care of maintenance only. Accoridng to this finding, the agreement will be built with the Ministry of Roads, Transport, Construction and Urban Development and its maintenance cost will be provided by the project. As for the water supply issue, local needs, including herders and local usage, will be provided with the water resource of the project.

Q: OT monitoring issue is inevitable. What organization will be in charge?

Minister D.Zorigt: The annual auditing will be made on the project and the report will be submitted to the state institute.

Q: The main version is ready to submit to SGK. What would you say about it?

Minister D.Zorigt: Yes, it is. The newly edited version has clauses that ownership is 34%, full tax imposed, pre-payment increased. The Standing Committee made proposal to own 34% without investment contribution, to increase pre-payment, not to give tax waive. In relationship with this proposal, the new version is submitted for the discussion.

Q: President’s 55% proposal omitted the ownership of 34%. Also, public discussion is all about 55% of profit share. So, is 34% ownership included in the version of 55% of profit share?

Minister D.Zorigt: According to the new version, the pre-payment is increased to 225 million US$ with less interest rate and the profit share of 55%. More clear and precise disclosure will be made after detailed presentation to the party groups at SGK.

Q: Does the new version include the state ownership?

Minister D.Zorigt: No.

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6 Responses to Minister D.Zorigt: The main version is ready to submit to the discussion

  1. investor says:

    Do you know if IVN and RTP has agreed to the changes? Thanks.

  2. Amarsanaa says:

    agreed, that is why it is presented to the final discussion

  3. Barry says:

    Amaransaa?
    When will it be possible for you to post the entire agreement.
    I hope that is as soon as the agreement is finished.
    Personally I do not expect the MPRP to sign this version, either.
    If IVN / RTP fewel that this version of the IA is a workable agreement,and the Mongolian working group feeld confident in this version, What are the odds that it will be signed,,,,and when?
    Thanks for all that you have done to keep us informed.
    Thank D. Zorigt Minister of Minerals and Energy for me also.
    I know this has been tough for him to get accomplished.
    I have many question that I am in hope that when final IA is published they will be answered.
    “B”

  4. Eric says:

    I too am looking forward to the news.

  5. Barry says:

    The little information that has been released about this agreement leaves me to believe that much of the infrastructure costs for the South Gobi region are being placed on IVN / RTP.
    Roads, Railroads, electricity, water, Isn’t this a lot of cost to be assesed to ONE mine project? If others (mining companies, etc), use these facilities can IVN charge these other users for their use. How will IVN recover their costs for these infrastructure investments? Many questions left unanswered.
    “B”

  6. Barry says:

    Now the SGK has publihed comments that there is still no agreement on the OT IA.
    More changes more delays.
    What does the Minister of Minerals and Energy have to say today about the progress by SGK and the MPs?
    with comodity prices due to drop, the economy of Mongolia hangs on the MPs agreeing to the IA. That appears to be someething they will never do. “B”

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