After the decision of railway policy, Tavan Tolgoi concept, Sainshand Industrial Complex issue is in highlight of the Mongolian Development in this fall. Sainshand is center of Dornogobi aimag. Upon completion of the complex, GDP of Mongolia would reach $41 billion between 2010-2021 and 76 thousand direct employment position and over 150 thousand indirect workplaces would be created.
The State Great Khural ordered to the Government to build Investment Agreement of the Industrial Complex of Sainshand within the third quarter of 2010, along with Tavan Tolgoi deposit issue. Here MP Ya.Batsuuri, former diplomat and elected from the Dornogobi aimag, has more to share.
Q: Industrial Complex will be built at your electoral district. As for a man who originated the idea, what would you say about it?
MP Ya.Batsuuri: If you truly want to develop your nation, bring higher salary to your people and build new modern city, we should develop our mineral resource and export value added products. Its starting point is firmly established. The spring session of the State Great Khural adopted railway policy document. Horizontal direction of railway from Tavan Tolgoi – Sainshand – Baruun Urt – Choibalsan is certain and our exit through Russia is also certain. Therefore, heavy industry complex must be established immediately. The working group, lead by PM, is actively conducting research works on the issue. Creation work can be started by this autumn.
Thanks to Sainshand Complex, Mongolia will make great leap towards becoming heavy industrial production from just a small raw material supplier. Even Japan and South Korea without mineral have developed heavy industry, but we, rich in mineral, are lagging well behind.
Q: There is a study that the industrial complex will require $14 billion. But we don’t have such fund. Where do you see such fund might come from?
MP Ya.Batsuuri: Investors are almost ready. South Korea and Japan already expressed their interest. China expressed its interest in the complex investment during its Premier’s visit. China adds value to our mineral, which is acquired cheaper, when their supply Korea and Japan. Mongolia, Japan and Korea share same opinion on the investment of Sainshand Complex and direct export of mineral product. Therefore, I don’t see much problem in attracting investment in the project.
Q: As you commented earlier, oil refinery will be established along with chemical-coke, copper-smelting and metallurgy factories.
MP Ya.Batsuuri: Zuunbayan has rich oil fields. The very first oil refinery and petroleum factory was established here over some 50 years ago. Many foreign and domestic companies are exploring oil in this area. Some outcomes are quite positive, but some are just about to start their exploration. If Dornod oil will be refined at Sainshand refineries, we can supply domestic demand. Therefore, we will be no longer dependant to imported petroleum. Even Dornogobi is rich in coal, an alternative resource of petroleum. Experts are studying possibilities and developing feasibility study on iron ore from Darkhan and zinc from Sukhbaatar in Sainshand.
Q: Quite agree with your idea on making deal with buyers, how supportive is the Government?
MP Ya.Batsuuri: In this case, we will receive less risk. Some say we should invest by ourselves to Tavan Tolgoi, but I believe that we should make co-investment together with buyers’ side, because we have only two markets to enter.
Q: Prior to establish the complex, we should prepare as much as possible. For example, we will expand capacity of Technical and Vocational Productivity Center (TVPC) Gobi – Sumber aimag. Ivanhoe Mines started talks on project with budget of some $2 million in gobi aimags. Mongolian youth shall be trained at TVPCs in order to provide their active involvements.
MP Ya.Batsuuri: Nowadays, modern industrial complex worker gets salary of $3000 per month. People may not believe in it, but mineral price surge allows it. Erdenet gives ₮1 million to its workers when windfall tax is imposed and with older technology. Sianshand complex will be furnished with the most up-to-date technology, therefore, it can provide better salary to its workers.