PM N.Altankhuyag: There is no income

Aug 8 • Economy, Featured, Mining, News, State Affairs • 3624 Views • No Comments on PM N.Altankhuyag: There is no income

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In the weekly PM’s 30 minute conference with press PM N.Altankhuyag presented some answers on current issues.

Price of real estate has been rising since the implementation of 8%+ mortgage. What is the policy for holding the price increase?

Government made a decision to implement the 8% mortgage program. We also took all the possible measures to prevent the increase in real estate price. Government provided soft loans for the construction companies for their incomplete constructions. Construction material price level rises in the summer and spring. We have implemented a prevention program in cooperation with the Bank of Mongolia. We also warned the companies that if they rise their prices there will be consequences of eliminating them from the program. Thus, we have two companies facing this consequence. We cannot decide or instruct on the companies that has not participated in the program and control the price.

There is a rumor on the financing of 8% mortgage is exhausted?

We worked for many years to form a reformist government that does not implement short-sighted policies. The rumor is a lie. Due to these kind of news people panic and there is a empty demand. The program will be in place for a long time. If there are apartments, there will be a mortgage program. There is no fear of exhaustion.

Please express your position on pause of the underground development of OT project. There is a rumor that because of this, 2000 Mongolian employees will lose their jobs?

Mining Minister will make a statement this issue. To be brief, there aren’t any blockage from the Mongolian side. As a Prime Minister I participated in the first export ceremony. The work is being done in accordance with the Investment Agreement. Yes, there are things to talk about. It doesn’t mean that we have to halt or stop the mine.

There is a letter from Erdenes OT CEO Ts.Sedvanchig to Rio Tinto. Slightly, misunderstanding statement was included in the letter indicated that: Perhaps the government will take this issue  (project financing) to for parliamentary approval. The Mining Minister affirmed with a letter that a company CEO doesn’t express government or SGK’s position.

Tomorrow, the Mining Minister will show this letter. We are affirming as a government that we will continue to support OT project. But, we will talk about the issues we have to solve. There is no issues of Mongolian employees losing their jobs. In the coming Monday, Head of Copper Group of Rio Tinto will have a talk with the relevant officials. We have received a letter with 4 points. First, copper export will continue. Second, let’s decide on the project financing. Third, let’s talk on unsolved issues. Fourth, let’s talk on addition financing.

What is reason of the USD increase against MNT? What is your conclusion?

There are many reasons. The Bank of Mongolia will make a official report on this. In fact, there will be a joint report from Bank of Mongolia, Ministry of Finance, Ministry of Economic Development and Ministry of Mining. After the report is released, we will decide on further actions. Perhaps there will be a session in cabinet meetings as well as in SGK session.

For example, Mongolia is exporting copper, coal and gold etc. However, there is no income. Economic units are working and exporting, but cannot bring in a single dollar home. The reason being is that the money is already pre-spent. USD250 million from OT (Pre-tax and IoU), USD350 million from Chalco (pre-payment of coal from TT) has been distributed to the population. USD170 million is the outstanding amount from Chalco debt. We exporting coal, but it just pay off of the loan. Thus, TT will continue to work to pay off its debt. Also, the Erdenet has been put in a difficult situation. Before exporting their copper, they received a prepayment and also it has been distributed through Human Development Fund. So, if we add 250+350+300 million dollar will equal about trillion MNT in minus.

Because we realize the consequences, we will try to expand TT operations. East Tsankhi will end up paying its debt this year, where West Tsankhi should commence operations. We need to export at least 2 million tons to start receiving some revenue. Also, we need to stop purchasing unnecessary goods in USD. Some schools demanded the students and pupils to pay their tuition in dollars. We have stopped this. We need to stop creating unnecessary demand for USD. As for the government, we will try hard to increase the export. After the joint report, further actions will be apparent.

Is there enough currency to make intervention. Thus, will the bond money be used for that purpose?

We will not spend the Chinggis Bond money on these kind of events. It will be spent on development and infrastructure. Those things that will make a dollar into two.

The Finance Minister will make a statement on bond related updates soon.

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