Cabinet’s Head of Public Relations G.Otgonbayar issued a public statement regarding details and concerns surrounding the Tavan Tolgoi project following a meeting held last week with the mega project’s Chinese investors.
A Cabinet working group tasked with restarting the Tavan Tolgoi project met with representatives from Shenhua Group last week. News of the meeting led to many questions regarding the involvement of other companies in the project, namely Mongolian Mining Corporation, Energy Resources LLC, and Sumitomo Corp. Many observers wondered if the Mongolian and Japanese companies had been cut out of the project, and if the government had developed a consortium with Shenhua Group.
“The beginning of the meeting with Shenhua Group was open to the press. After the meeting, there were concerns about why the working group only met with Shenhua Group and not MMC, Energy Resources, or Sumitomo. I will provide more information regarding this issue. After the working group led by Minister of Mining Ts.Dashdorj met with Shenhua Group, they met with representatives from domestic companies involved in the Tavan Tolgoi project. During their meeting, the domestic companies agreed to take a unified position and work as a team on the project. They agreed to meet the working group at a later date,” G.Otgonbayar told the press and the public.
G.Otgonbayar also went into detail about the specific arrangements of the project and how it will be implemented. He said, “In order to implement the Tavan Tolgoi project as soon as possible, Prime Minister J.Erdenbat tasked the working group with negotiating and improving the contract with the winners of the tender under the previous contract. This is detailed specifically in the decree. Since project development is based on the previous contract, Sumitomo and MMC will be involved in the project.”
The Cabinet representative went on to highlight four key principles of the decree issued by the Prime Minister.
1. At least 51 percent of the company implementing the Tavan Tolgoi project must be owned by Mongolian interests, with Erdenes Tavan Tolgoi having a sufficient role in it.
2. At least 51 percent of the company building, using, and operating the Tavan Tolgoi-Gashuunsukhait railroad must be managed by Mongolian Railway.
3. Tavan Tolgoi coal must be processed in Mongolia before being exported. In order to do this, improvements must be made to the capacity of the existing processing factory and a new concentrate factory must be built.
4. The executors of the Tavan Tolgoi project should prioritize the involvement of Mongolian companies in supplying the project through all stages of its development.