PM Altankhuyag says no need to submit OT financing package to parliament or the cabinet for approval — In the western news media, Mongolia occasionally suffers from under-reporting, over-reporting and late reporting of news developments. That was the case with the recent short-lived anxiety about whether the GOM had actually told OT that the financing package for the underground mine had to be submitted to parliament.
At his press conference in UB on Thursday, August 1, Prime Minister Altankhuyag said it did not have to go to parliament or the cabinet. He made the following comments about Oyu Tolgoi and the relationship between the GOM and Rio Tinto/OT. The excerpts below are a rough and unofficial translation of the Prime Minister’s remarks. Boldface emphasis is added.
“There are times when parties may agree or disagree on an issue. The same thing before the export started — Prior to [the commencement of ore] exports, we wanted to clarify ‘where will the money from the export revenue be received? Which bank? What is the sales price of the concentrate?’ So we discussed this issue together and were able to reach an understanding, enabling exports to go forward.
“At present, there are many pressing issues that are awaiting resolution with respect to OT, including budget increases, etc. We will need to discuss them. But OT is in need of the second-phase additional financing which is required to undertake the underground mine development. We proposed to Rio Tinto that we should discuss and agree on the best, most mutually beneficial scenario for the project financing. In a letter dated July 29th, Rio Tinto’s CEO also communicated to us that they are ready to sit down for a discussion on this matter.
“So I had a talk with Gankhuyag Minister yesterday. Our position is this: Let’s discuss and resolve the issues as we go. We have no intention of stopping the underground mine work. The work must continue as it should. In the meantime, we will resolve the issues as we go on a parallel track.
“We are inextricably connected to the global economy…For that reason, we are inevitably exposed to various influences coming from the outside world. There are some people out there who are, either inadvertently or intentionally, are promoting the [false] message that ‘OT is not going to go forward’ or ‘OT’s value is falling.’
One reporter asked Altankhuyag about news reports that the GOM informed OT that the financing package had to be submitted to parliament for approval. The Prime Minister replied that there was no such requirement:
“There is no such thing as ‘has to be brought to Parliament” or “Oyu Tolgoi and Rio Tinto must be discussed at the Parliament” or anything of that sort. The Parliament has already made the decision and signed the Agreement.
“In fact, the Cabinet doesn’t have to be involved. All issues can be discussed and decided at the [OT] Board of Directors’ level. The Cabinet is not an institution with a mandate to be deciding what is working and what is not. We did not make such a decision [that the financing package must be approved by parliament.].
“One shortcoming we’ve observed with regards to OT is that its Board of Directors is not very good at discussing its issues. The Government of Mongolia is saying that, as a shareholder [in OT] ), you should make your decisions at the Board level.
“A letter [to OT/RT] was sent by Sedvanchig [executive director of Erdenes Oyu Tolgoi LLC]. The idea actually expressed in Sedvanchig’s letter was that ‘In the event the Cabinet is not able to make a decision on a legally disputed issue, the issue may be brought to Parliament for a decision’. Sedvanchig is a CEO of a company. There is Board of Directors above him. There are shareholders above the Board of Directors. The Cabinet is above the Board. Then there’s Parliament above the Cabinet. There is a very, very long way to go before it reaches the Parliament all the way, you see? So we remain in the position that we should sit down together to discuss these matters.
“As for the [second-phase] loan financing, the only issue is that the financing issue has not been thoroughly and fully discussed at the [OT] Board Level. It’s just a matter of technicality. Otherwise, there is no serious conflict with OT at all.
“What I told the OT management during the first shipment ceremony was that ‘There is no such thing as “You” and “Me”. There is only “us”’ We are on the same side. Both sides should benefit. We will collaborate in the future. That was the official, firm position of the Government I communicated.
“That said, it does not mean we are going to abandon the many outstanding issues between us awaiting resolution. We will continue to discuss and resolve them in parallel as we go forward. In other words, gold [sic] will continue to be exported. Copper concentrate will continue to be shipped. In the meantime, let’s sit down at a table together to discuss the additional financing and collectively decide what is the best most mutually beneficial option. There is nothing complicated, you see.”
Source: The North America-Mongolia Business Council