Oyu Tolgoi Investment Agreement is effective

Today, the Cabinet Meeting was held and approved the Feasibility Study of Oyu Tolgoi. D.Zorigt Minister for Mineral Resource and Energy, L.Gansukh, Minister for Environment and Tourism, S.Bayartsogt, Minister for Finance announced the press conference. The Feasibility Study of Oyu Tolgoi will be modified in every 5 years.

The Cabinet Meeting also discussed about the state policy on railway. Minister Kh.Battulga briefly informed that a new line of railway Tavan Tolgoi – Sainshand – Choibalsan will be built.

Minister S.Bayartsogt made clarification on the demand letter of certain MPs and commented that “any type of financial resource has time value”. Also he corrected the loan interest as not 5% but 2% per annum. According to the agreement, additional $50 million will be delivered by April 5 2010.
Some data of the agreement:

Feasible reserve size increased up to 31.1 million tons of copper, 1328 tons of gold and 7601 tons of silver. Total investment of the project is 1.588.4 billion MNT by the end of 2009 and 508,7 billion MNT of exploration and irrelevant expenses are removed from the above mentioned number. Therefore, total loan of the Government and Investors is 1079.9 billion MNT.

Rio Tinto’s share at Ivanhoe Mines is increased from 9.8% to 22.4%.

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