Prime Minister Ch.Saikhanbileg announced that Mongolia has acquired 100 percent ownership of the Mongolia-Russia joint venture Erdenet Mining Corporation (EMC), on Tuesday.
In the past, the government of Mongolia owned 51 percent, and Russia’s Rostech Corporation owned 49 percent of EMC.
The Prime Minister said that as a result of negotiation with the Russian side, Mongolia will continue owning 51 percent and the remaining 49 percent will be owned by Mongolian Copper Company on behalf of the Trade and Development Bank of Mongolia.
Through the transaction, EMC’s status has changed from a joint venture, regulated by international agreement, to a domestic entity, regulated by the Law on Companies of Mongolia.
The Prime Minister underlined that in the past, dividends from 51 percent of the total profit of EMC remained in Mongolia, and the other 49 percent went to Rostech. He claimed that now 100 percent of the EMC profit will remain in Mongolia.
Ch.Saikhanbileg said that he was concerned that inaccurate and false information might be reported following the transaction, and made further clarifications.
“All public organizations, including EMC, will be under Mongolia’s authority. No changes will be made to the staff of EMC. The joint Monrostsvetment factory also became Mongolia’s domestic entity though the same principle. Currently, EMC is operating normally and will conduct normal operations in the future,” the Prime Minister said.
He noted that Mongolian and Russian sides will make official statements soon, adding that the Russian side has resolved the issue on a high level. Ch.Saikhanbileg said that there will not be any participation from a third party, and that Mongolia will not face any financial and payment issues following the changes.
Prime Minister Ch.Saikhanbileg stated that after finalizing the negotiations with Russia, the Cabinet will submit and introduce the ownership issue to Parliament.
“This is a thing that many governments of Mongolia and its citizens have been waiting for to come about. We have resolved the issue on big debts owed to Russia, and the Cabinet paid the remaining portion to Russia. Now, EMC has become Mongolia’s domestic entity,” said Ch.Saikhanbileg.
Even though the Russian side didn’t release any official statements, Russian Business Development Company highlighted in their report that this will be a deal with the highest cash value in the history of Rostech. Bloomberg reported that Rostech is expected to get 500 million USD as a result of the negotiation with the Mongolian government.