The board of Mongolian Mining Corporation released a statement on December 15, announcing that the consortium of Energy Resources LLC, China Shenhua Energy Company Limited, and Sumitomo Corporation received an official letter from the working group established by the government (formed after the election held in June 2016) asking to continue negotiations regarding the Tavan Tolgoi project.
MMC stated, “The consortium has been informed that participation in discussions will continue with the working group representing the government regarding the terms and conditions of an investment and cooperation agreement and such other ancillary agreements in relation to the Tavan Tolgoi project. The company will make further announcements in connection with its conclusion of definitive agreements with the Government of Mongolia and/or its designated entities as and when required under the Listing Rules or other applicable rules and regulations.”
The company also informed shareholders and potential investors that even if definitive agreements are entered into, completion of such agreements will be subject to the satisfaction of previously agreed upon conditions. They emphasized that the company may or may not benefit from the Tavan Tolgoi project. Shareholders and potential investors were advised to exercise caution when dealing in the securities of the MMC.
The CEO of MMC, G.Battsengel,was interviewed by Bloomberg TV Mongolia on December 16, and provided details on the updates to the Tavan Tolgoi project. He reported that the structure of the consortium remains the same. “Compared to Tavan Tolgoi negotiations in the past, the government has expressed from the beginning that they will manage a majority stake in the railway. State-owned Mongolian Railway will own 51 percent and Shenhua Group will hold a 49 percent share. Energy Resources LLC will not be directly involved in the railway project,” said G.Battsengel.
The MMC CEO reported that the consortium had proposed that 75 percent of the products be sold to China and 25 percent to Japan and South Korea. He also noted that the consortium is focusing on refining the mining products in Mongolia before exporting them. G.Battsetseg stated that MMC is ready to start the project as soon as the negotiations are finished.
The price of MMC stock (975 HK) on the Hong Kong Stock Exchange was at 0.190 HKD a share on December 9. As of December 16, the price had surged to 0.295 HKD a share.