The Cabinet Meeting was held and discussed the issue of Tavan Tolgoi IA. Draft is ready to be presented to the State Great Khural after discussed by the National Security Council of Mongolia. According to Minister D.Zorigt, the main principles of Tavan Tolgoi IA was that Mongolia should be owner 100% and it will provide equal treatment to domestic and foreign bidders when selecting contractor.
Draft Request for Proposal for the interested bidders for Tavan Tolgoi deposit, Draft Investment Agreement, draft amendment on the Mineral Law of Mongolia and the draft resolution of the State Great Khural on “Some issues of exploiting Tavan Tolgoi Coal Mine” were discussed by the Cabinet Meeting and it resolved to present to the State Great Khural, after reflecting findings and comments of the National Security Council.
Introduction of Draft Investment Agreement
The Investment Agreement will consist of 19 chapters, 144 articles and 2 appendixes. The draft reflects many aspects such as to provide stable tax environment, to give authority to the license holder to sell its product and manage its revenue, to mine the deposit with less harmful for the environment and public health, to recover the landscape and not to cause negative impact on its side businesses and production activities, to develop region and creating new workplaces.
According to the proposal made by the Government, the request to build the Investment Agreement shall be made by “Erdenes MGL” Company, mining license holder and state – owned company. On the one hand Minister for Finance, Minister for Mineral Resource and Energy and Minister for Environment, on behalf of the Government, on the other hand, Erdenes MGL and investors shall sign the agreement.
Brief introduction of the draft rights release agreement on coal mining
Coal mining rights release agreement has 21 articles, 1 appendix and it reflects standard arrangement of both sides, including price calculation formula, product split, pre-payment and bonus and reporting procedure.
The draft was developed by considering and reflecting experience from the Australian and Indonesian coal mining agreements and the Mongolian oil product split agreements.
Yesterday afternoon, Prime Minister S.Batbold presented the draft of Tavan Tolgoi Investment Agreement, with accompaniment of MP D.Zorigt, Minister for Mineral Resources and Energy and MP L.Gansukh, Minister for Environment and Tourism.
Prime Minister S.Batbold stated that Tavan Tolgoi will be in operation after fall session of the State Great Khural, within 2010 and the draft Investment agreement will be ready before the State Great Khural opening. When developing the draft, the deposit will be owned 100% by the state and all requirements assure equalt treatment to all interested parties, yet supporting the involvement of the national companies.
Due to the statement of supporting national companies, two interested group of companies were established; Mongol 999 Consortium and Consortium led by the Chamber of Commerce and Industry.
About the pre-payment, no number is stated, but it is clear that several laws including Law on Mineral have to be amended.