The Cabinet Ministers Meeting was held on Tavan Tolgoi project

RTB document on selecting bidders on Tavan Tolgoi and a draft investment agreement with the selected contractor are discussed and commented by the Cabinet Ministers. They will be proposed to SGK after presented to the National Security Council.

In relations with the investment agreement with investor, it is agreed and supported by the Cabinet Ministers to amend the Article 29 of the Mineral Law of Mongolia, according to SGK regulation.

Also it grants approval to the working group to make negotiation based on the international standard to evaluate the reserve.
The investment agreement will be signed by three parties, the Government of Mongolia, Erdenes MGL, a state –owned company and holder of mining license of ‘Tavan Tolgoi’ and the strategic investor, selected to jointly mine the deposit.

The strategic investor in the mine will be a foreign company. Because the stability provision on taxation is directly related to foreign investors, the working group considers that it is possible to involve the foreign investor in this agreement, to operate in the deposit under the coal exploitation agreement with a state owned company, a holder of the license.
The coal exploitation agreement, to be built between Erdenes MGL and the selected company, will be attached to the Investment Agreement.

If the government approves the tender bid documentation, the invitation for tender bid will be sent to the negotiating companies and it is planned to receive their proposals within 1.5-2 months period after the invitation is sent. In selecting the investor, their capacity index, financial and technical proposal, project phases, planning will be rated.
During the two phases of the negotiation, proposals from the investor sides and concept of exploiting the deposit. But the working group estimates to propose for the approval of the certain directions of the final phase negotiation, after presenting preliminary evaluation on the open selection to the Government.

As for now, Vale, a Brazilian company, Jindal Steel and Power, an Indian company, South Korean Consortium, consists of 11 South Korean companies, the Russian consortium, consists of two Russian companies, joint consortium Peabody Energy and Shenhua Energy Corp., Mitsui and Co and another Japanese consortium, lead by Itochu, and other Japanese companies such as Sojits, Marubeni, Sumitomo, “Extrata”, Australian – Swiss joint company, “Russian Railway” Cooperative, “Erdos Chinglong Coal” submitted their proposals.

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