Ch.Khurelbaatar, Chief of the Cabinet Office and Member of the government’s working group on Tavantolgoi investment agreement was interviewed regarding the TT’s IA.
Q: How is the discussing going with the investor companies? What step is the investment agreement at?
Ch.Khurelbaatar: The working group had made a draft and it is already discussed in the Cabinet meeting and the materials are now sent to the National Security Council. After that the draft will go through the Cabinet and will be discussed once again.
Q: When will the meeting of the National Security Council are held? Does the working group have any information on this?
Ch.Khurelbaatar: For now, we haven’t received any information on that.
Q: The last Government’s official source says that the investor companies for Tavantolgoi’s western block were chosen as it states 40% for Chinese Shenhua, 24% for American Peabody and 36% for Russian and Mongolian Consortium. Why were the Japanese and South Korean companies were excluded and when?
Ch.Khurelbaatar: We have not made any decisions to exclude Japanese and South Korean companies. In fact, Japanese Mitsui came in with Shenhua as a joint consortium and South Korea made bids with Russia. We expected better bid from South Korea and Japan which could be about building steel production factory in Mongolia but they were against that. In another words, I have to say that the bid was not good.
Q: So what did Chinese Shenhua, American Peabody and Russian Railway promise?
Ch.Khurelbaatar: Shenhua will sell thermal coal as well as the coking coal. Peabody’s technology and production is important to us and Russian Railway is very important for us in terms of coal transportation.
Q: Where did the Mongolian Company came out from? The Japanese and South Korean companies must wonder about that because Mongolian company did not take part in the earlier stages of the tender bid?
Ch.Khurelbaatar: First of all, during the early stages of the tender bid we announced that Resolution #39 of the Parliament states that Mongolian company must take part in the tender bid. The company that will represent Mongolia should be state owned. We also told the bidders that State Property Committee will be the representative of that. Therefore it is nothing to be surprised about.
Secondly, the Resolution #30 of the Parliament also states that during the tender bid process companies are able to move away from one consortium or even merge together so the tender bid process is all going under the terms of the law.
Q: So the Mongolian company that will represent Mongolia will be Erdenes MGL?
Ch.Khurelbaatar: You can say that State Property Committee will represent.
Q: The investor sides are to pay initial payment of USD 1 billion to the Mongolian Government? What is the circumstance?
Ch.Khurelbaatar: USD 500 million will be paid as non returnable investment and USD 500 will be paid as prepayments. Mongolian company is also payable of its investments in according to its percentage of share.