During a press conference held yesterday, Chairman of the Trade Union of Erdenet Mining Corporation (EMC) N.Batbaatar announced that he believes that the staff of EMC should be entitled to own a percentage of the shares of the Mongolian-Russian JSC that were recently wholly transferred to Mongolian ownership.
Last week, Prime Minister Ch.Saikhanbileg announced that Mongolia had acquired 100 percent ownership of EMC, a Mongolia-Russia joint venture. In the past, the Government of Mongolia owned 51 percent of EMC, and Russia’s Rostech Corporation owned 49 percent. The Prime Minister said that as a result of negotiations 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 Trade and Development Bank of Mongolia.
At the press conference, N.Batbaataar underlined that he was making the statement on behalf of over 6,000 employees of EMC, over 2,000 EMC retirees, and 500 former employees who had suffered from industrial accidents and injuries.
In 1992, the Government of Mongolia made a decision to issue 15 percent of the shares of EMC to the public, in order to provide them with ownership, and issued blue and pink share certificates.
Batbaatar said, “Once EMC’s ownership belongs to Mongolia, its workers and senior workers need to own the company’s shares. Beginning in 1990, the government issued blue share certificates to the public. There are still some people who kept them to use it for EMC’s privatization. It is fair to allow EMC’s workers to own 15 percent of the company’s shares. At that time, Director of EMC Sh.Otgonbileg tried to privatize EMC, and even former Prime Minister P.Jasrai supported the issue, but it remains unresolved today.
“We collected 10,140 blue certificates for EMC’s privatization, which were saved with a brokerage in 1994. In 1996, Mongolia decided to include Erdenet on a list of strategically important deposits that would not be privatized, and we had no other choice but to keep our certificates. Unfortunately, someone used around 4,000 certificates for the purchase of State Department Store, but more than 6,000 tickets were still saved. People didn’t forget that the price for blue and pink certificates was 10,000 MNT, and the blue one alone was valued at 7,000 MNT.
“We demand to transfer the value of the blue certificates to today’s market valuation and to index them, distributing 15 percent of EMC’s shares to its employees so that they have their own property,” said Batbaatar.
He said that when Erdenet Carpet Factory was privatized, people were given company shares in exchange for their blue EMC certificates, and claimed that the same principle can be used now for EMC employees.
Batbaatar emphasized that the total value of EMC stands at around one billion USD, and said that 15 percent of its value can be equally distributed among its 8,500 workers.
After the press conference, the trade union leader was interviewed by local media outlets.
There were rumors going around that Mongol Copper, which acquired 49 percent of EMC, is a company with foreign investments. Have you looked into this?
I don’t know much about that company, but it is true that Russia has sold its 49 percent ownership. Everything will become clear soon.
Is it possible to privatize 15 percent of EMC’s shares when nothing is definite yet?
The issue of how to privatize 15 percent of EMC is under the government’s and Mongol Copper’s authority. But the government needs to implement and continue its previous decision on privatization.
What would be the advantages of acquiring 49 percent ownership of EMC?
Previously, when we were cooperating with Russia, there were many advantages, but also several difficulties. For example, when one of the sides didn’t finalize the selection of its board members, the joint venture council couldn’t hold meetings to review its operations and approve plans for the next year. By transferring ownership to Mongolia, the board will now be able to hold regular meetings and make decisions without wasting time. It is important to not forget about the salaries and social protection issues of the company’s employees, and to not lower tax contributions to the state budget in the future.