Mongolia Business and Mongolian Daily Business News

Prime Minister S.Batbold informed that Mongolia will pursue policy to own Tavan Tolgoi deposit 100%. Faith of Tavan Tolgoi is set to be decided during the spring session of SGK.

After this notice, there was fear of who would be interested in Tavan Tolgoi deposit accepting an operator’s status. The government said that interested bidders will not own share or equity of the deposit, but they will pay the payment for mining. But Minister D.Zorigt is confident that interested parties would be interested in the project, because such deals are common in the mining world. Read the rest of this entry »

Prime Minister S.Batbold said Mongolia will hire international investment banks to sell shares abroad. The Parliament has given the approval for the government to start the preparation to transfer gold, copper and coal reserves into companies that would then sell shares to global investors. This step is a demand and a necessity for Mongolia and it will potentially transform the country’s economy according to the Prime Minister. USD 25 billion of foreign investment over 5 years is needed to develop the metal and coal resources. USD 2 billion Tavan Tolgoi coal deposit is included in the list.

You can access the full report on www.eurasiac.com

Tavan Tolgoi:  At the Crossroad

Government to retain 100% percent of Tavan Talgoi.  The Prime Minister Batbold has confirmed today the Mongolian government’s preference to retain 100% ownership of the massive Tavan Tavan coking coal project and use a “mining contractor” model.  Therefore, the international tender for equity stake in Tavan Tolgoi is now in doubt. While the equity sale option has not been entirely ruled out, the Government intends to hire a mining contractor to develop and operate Tavan Tolgoi deposit.

Tavan Tolgoi is among the world’s largest undeveloped coking coal deposits. The deposit with appr. 5.1bn tonnes in total resources is located about 200km to the north of China, the world’s largest coal consumer. Proximity to China, unique geology and economics of the deposit provide strong fundamentals to the project and raise optimism about its success. Production cost is highly competitive at US$9-US$10/ton of raw coal and US$15/ton for final product, and transportation cost in Mongolia at US$0.02/ton-km. Read the rest of this entry »

photo courtesy of meforum.mn

Prime Minister S.Batbold held a meeting with Tavantolgoi project task group. Guidelines and procedures for using the deposit was approved by the Parliament resolution No.40 in 2008 and accordingly a  task group comprising of Ministry of Mineral resources and energy, Ministry of Finance, Ministry of Environment and tourism, Ministry of Justice and Domestic Affairs and State Property Committee has been established. PM highlighted the importance of creating legal regulations by the Parliament and the Government for constructing chemical and steel metallurgic plants based on strategic deposits, which would contribute greatly to the Mongolian economy, creating necessary infrastructure and producing VAT included products. According to the Minister of MRE, south Gobi infrastructure plan for constructing railroads, power plants and water resources necessary for Tavantolgoi utilization is ready for submission to the Government. The resource estimate of the deposit has been changed as results of hiring Canadian Norwest company as a project technical Consultant and Sanh resources may be increased by USD 5 billion. Upon resource increase, the amount of tax income and advance payment to the state budget shall go up as well. Read the rest of this entry »

Last Friday, the General Session of the State Great Khural was held and MPs P.Altangerel, S.Byambatsogt, D.Gankhuyag, G.Zandashatar set questions on Tavan Tolgoi from the Prime Minister. Tavan Tolgoi was explored by the budget and its reserve was registered to the Mineral Wealth Council. MPs wanted to receive more detailed information on this issue. But MPs were frustrated with absence of Prime Minister and Minister for Mineral Resources and Energy.

On behalf of the Prime Minister, Mr. Ch.Khurelbaatar, Minister for Cabinet Secretariat, answered to the questions.

Brief background:

Tavan Tolgoi deposit ahs reserve of 6.42 billion tons of coal, 1.8 billion of cocking coal. The deposit was in mining operation in 1967 and mined 9.8 million tons only. Energy Resource and Tavan Tolgoi Companies are mining coal, two companies of Tavan Tolgoi area license holding companies, excluding Erdenes MGL and Daitsukui LLC. The export price is set in accordance with the average price of coal at Shaanxi Province of People’s Republic of China. Read the rest of this entry »

On collaboration in using Tavantolgoi coal, 11 companies have sent their proposals. However no replies were given on whom to choose. Active talks and discussions will start next month-February. Ministry of Mineral Resources and Energy plans to organize number of open discussions in order to find out right options by seeing the issue from different angles. The first discussion has been held last Friday. According to Minister of MRE D.Zorigt, an efficient option would be selected and the initial criteria for efficient option include economic efficiency, income to Mongolian budget and maximum share for Erdenes MGL, state-owned company, implementing Tavantolgoi project. Read the rest of this entry »

Dec. 9 (Bloomberg) — Peabody Energy Corp., China Shenhua Energy Co., Vale SA and other companies interested in mining a coal deposit in Mongolia should expect to produce fuel for domestic consumption if they’re awarded the development rights, a lawmaker said.

The winning group of investors, to be selected by April, will be required to convert some of the thermal coal in the Tavan Tolgoi deposit into clean-burning fuel, Batkhuu Gavaa, deputy speaker of Mongolia’s parliament, said in an interview today in the capital, Ulaanbaatar. Lawmakers want to include the provision into any agreement to help cut Mongolia’s dependence on foreign fuel and create jobs, Gavaa said. Read the rest of this entry »

There are 36 coal deposits in Mongolia and Tavan Tolgoi, Tavan Tolgoi Trans, Mongol Alt, Energy Resource companies are exporting coal to China. Coal is transported by dump trunks to Shiveekhuren, Gashuunsukhait ports. For example, distance between Tavan Tolgoi – Gashuunsukhait is 250 kms. This road is heavily eroded, leaving no pasture around it. If it continues as it is now, it will bring environmental hazard to the nature. Therefore, Ministry of Mineral Resources and Energy has developed the general plan to build road by “Erdenes Mongolia” LLC. Ministry will propose the issue to the Government level. Read the rest of this entry »

photo courtesy of gogo.mn

Minister for Mineral Resources and Energy D.Zorigt reveals some updates on Tavan Tolgoi project.

Q: Can you update our  readers on Tavan Tolgoi project and its economic realization issue?

A: Talks, negotiations and studies are being made on this issue. As for now, we met with over 10 companies and made initial presentation of the project. Especially, Ministry of Mineral Resources and Energy will finalize policy on railways and infrastructure and then meet with investors. Also a working group is working on the perspective of Southern Gobi Region development architecture. The First Deputy Prime Minister is appointed as the Chairman of the working group. Therefore, if the working group makes conclusion, its negotiation will intensify.

Q: How much progress has made by advisory companies?

A: We chose advisory companies at the end of the last year. Moreover, we initiated talks with the top and well respected companies in the world.

The international conference on strategy of the Mongolian railway infrastructure will be held tomorrow.

This conference will focus on logistics and infrastructure to deliver mineral products of Oyu Tolgoi and Tavan Tolgoi to the world market. According to the research, bulk loads requires railway transportation.

Therefore, the railway between Tavan Tolgoi and Sainshand City will be discussed. Industrial Park is planned at Sainshand City and it was revealed by the Prime Minister’s speech during the Oyu Tolgoi Investment Agreement ceremony.