Can Mongolia’s elections shun democratic backsliding?

Authors: Byambajav Dalaibuyan, Mongolian Institute for Innovative Policies and Julian Dierkes, UBC
On 24 June 2020, Mongolia will hold its eighth parliamentary election since adopting its 1992 democratic constitution. This election is significant at a time when democracy worldwide increasingly appears under threat. It will assess the state of Mongolia’s democracy — which has exhibited signs of weakening — and whether the country can buck a global democratic backsliding trend.

A total of 606 candidates, representing 13 political parties and 4 coalitions as well as 121 independents, will compete in the election. Both the incumbent Mongolian People’s Party (MPP) — which won 65 of 76 seats in 2016 — and the opposition Democratic Party (DP) are running candidates in all 76 election districts.
The record number of 121 independent candidates is a response to perceptions of failure of the Mongolian party system. Public trust in the two established political parties and parliament has dropped. Frustration and anger has been building over the incompetence of many members of parliament and their direct involvement in the embezzlement of state funds in recent years.
Last November, the MPP-dominated parliament adopted amendments to the 1992 constitution intended to strengthen Mongolia’s parliamentary system of government, judicial independence and government stability. The amendments are particularly important as President Khaltmaa Battulga has become increasingly hostile towards parliamentary democracy and judicial independence. The next parliament will need to adopt further laws to fully implement the amendments.
Five candidates, two from the MPP and three from the DP, have been arrested since the election campaign started. These arrests are politically motivated and target politicians who have been in conflict with either Prime Minister Ukhnaa Khurelsukh or President Battulga. The General Election Committee has not reacted to these violations of candidates’ rights.

For more, go to following links.

Alcohol sales to be banned in Mongolia during upcoming parliamentary elections

ULAN BATOR, June 22 (Xinhua) -- Sales of all types of alcoholic drinks will be forbidden across Mongolia during the upcoming parliamentary elections, local media reported Monday.
Mongolia is expected to hold the parliamentary elections on Wednesday.
There will be a 72-hour ban on the sale of alcohol from Tuesday to Thursday in the capital city of Ulan Bator, which is home to more than half of Mongolia's population of 3.2 million.
Meanwhile, sales of alcoholic beverages will be prohibited in all 21 provinces of the country on the eve of the elections and polling day, namely Tuesday and Wednesday.
Mongolia's parliament is unicameral, consisting of 76 lawmakers each serving a four-year term.
The landlocked Asian country last held parliamentary elections in June 2016. Enditem

Six parliamentary candidates detained in Mongolia

ULAN BATOR, June 20 (Xinhua) -- The Mongolian authorities have recently detained six parliamentary candidates amid the ongoing campaign for the upcoming parliamentary elections, according to local reports.
Four of the detained politicians are candidates from the country's opposition Democratic Party and the remaining two are independent candidates.
Among the arrestees are former Finance Minister Sangajav Bayartsogt, and Bayanjargal Byambasaikhan, chairman of the Business Council of Mongolia, who are allegedly implicated in a large mining deal involving foreign investment.
The sudden decision to detain the parliamentary candidates on the last few days before the legal deadline for the election campaign is an "illegal act" and "politically motivated," said attorneys of the candidates and some Mongolian netizens.
Mongolia is expected to hold general elections on Wednesday.
The country's parliament, the State Great Khural, is unicameral, consisting of 76 lawmakers serving a four-year term. Enditem

China-backed AIIB approves $100 mln loan for Mongolia's virus fight

BEIJING, June 19 (Reuters) - The Beijing-backed Asian Infrastructure Investment Bank (AIIB) has approved a loan of $100 million to help Mongolia battle the coronavirus pandemic, the bank said on Friday.
The project, cofinanced by the Asian Development Bank, will support a government program covering public health funding, protection of vulnerable groups, support for businesses and fiscal stimulus measures, the bank said in a statement.
The loan is part of the AIIB's $10 billion funding facility to help public and private sectors fight the outbreak.

IMF Executive Board Approves US$99 Million Disbursement Under the Rapid Financing Instrument to Mongolia to Address the COVID-19 Pandemic

  • The COVID-19 pandemic has taken a large toll on economic activity in Mongolia, giving rise to urgent budget and balance of payments needs.
  • To support Mongolia, the IMF has approved the request for emergency financial assistance under the Rapid Financing Instrument (RFI) of about US$99 million.
  • This emergency financial assistance will help support foreign exchange reserves, create fiscal space for essential pandemic-related expenditure, and catalyze donor support.
WASHINGTON, DC – The Executive Board of the International Monetary Fund (IMF) approved Mongolia’s request for emergency financial assistance under the Rapid Financing Instrument (RFI) equivalent to SDR 72.3 million (about US$99 million, or 100 percent of quota) to meet urgent budgetary and balance of payment needs stemming from the outbreak of COVID-19 and to support the most affected sectors and vulnerable groups.
Following the Executive Board’s discussion of Mongolia, Mr. Mitsuhiro Furusawa, Deputy Managing Director and Chair, made the following statement:
“Mongolia has successfully avoided a domestic outbreak of COVID-19 thus far, helped by the early introduction of social distancing and tight health protocols for cross-border flows. Nonetheless, the pandemic has sharply reduced economic activity due to both the economic cost of the containment measures and the fall in external demand. There is now an urgent balance of payments need and a fiscal financing gap.
“The authorities have already taken a number of measures to limit the economic contraction and help the most vulnerable. Recent revisions to the budget allow for higher health and social spending as well as tax relief to affected households and businesses. In addition, the Bank of Mongolia has eased monetary and financial policies to help prevent a disorderly contraction in bank lending to the private sector.
“Emergency financing under the IMF’s RFI will provide much needed support to respond to the urgent balance of payments and budgetary needs. Additional assistance from development partners will be required to support the authorities’ efforts and close the financing gap. The authorities’ commitment to high standards of transparency and governance in the management of financial assistance is welcome.
“As the immediate threat to the economy subsides, it will be critical to resume key reforms begun during the recent Extended Fund Facility arrangement. These include a return to fiscal consolidation to reduce still high public debt, a more flexible exchange rate to build up foreign exchange reserves, remedying AML-CFT deficiencies, and stronger supervisory enforcement to ensure that all banks have sufficient capital.”
IMF Communications Department
PHONE: +1 202 623-7100EMAIL: MEDIA@IMF.ORG

Mongolia throws a power station curveball at Rio Tinto

The cost of expanding Rio Tinto's Mongolian copper project could decline by almost $US1 billion ($1.5 billion) under a surprise Mongolian government plan that could increase the host nation's long-term influence over Rio and the project.
The Mongolian government has told the Rio subsidiaries building the $US6.8 billion Oyu Tolgoi copper expansion that it plans to build a state-owned coal-fired power station that would provide a long-awaited domestic power source for the mine.
The latest curveball from the Mongolian government comes barely a month before parliamentary elections in the developing nation, and a week before Mongolian courts hear charges against the government officials who signed the 2015 agreement that underpins the Oyu Tolgoi expansion.

The existing mine at Oyu Tolgoi is powered by coal-fired electricity that is imported from neighbouring China, but Mongolia has demanded that Rio find a domestic power source before June 30, 2023.
Rio flagged in February that a $US924 million coal-fired power station was the most likely domestic solution, although it indicated it would not be finished before June 2024.
The Mongolian government disagreed with Rio's $US924 million power station proposal, and has since told Rio and its subsidiaries that it plans to build a state-owned power station at the Tavan Tolgoi coalfields.
The surprise move has both short-term and long-term ramifications for Rio and the Rio subsidiary that owns 66 per cent of Oyu Tolgoi, Turquoise Hill Resources.

Leverage over the project

A government-funded power station would reduce Rio and Turquoise Hill's near-term spend on the project; a prospect that would appeal to minority investors in Turquoise Hill given the company needs to raise "at least $US4 billion" in further funds to cover cost and schedule blowouts on the Oyu Tolgoi expansion.

But a government-controlled power station would give the government a long-term source of leverage over the mine project, which could be important given the fractious nature of Mongolia's relationship with Rio.
The government is also understood to believe it can build such a power station cheaper than the $US924 million price tag suggested by Rio and its subsidiaries.
Turquoise Hill said it was broadly supportive of the government-owned proposal, subject to further agreement over the commercial terms for the supply of power and construction timelines.
Rio and its subsidiaries would likely need a guarantee they can continue importing power from China until the Mongolian government power station was built, suggesting the June 2023 deadline for Rio to find a domestic power source could be extended.

Signatories in court

The surprise proposal for a government-owned power station comes a week before scheduled court appearances by the two men who in 2015 were the Mongolian government signatories to an agreement that allowed the Oyu Tolgoi expansion to go ahead.
Bayanjargal Byambasaikhan was chief executive of Mongolia's sovereign wealth management company Erdenes Mongol in 2015 when he joined Rio Tinto's now chief executive Jean-Sebastien Jacques in signing the expansion agreement in a Dubai hotel.
Known in Mongolia as Byamba, he has since been accused of abusing his authority in signing the deal, which effectively kick-started the project without requiring approval from the Mongolian parliament.
Byamba is now chairman of the Business Council of Mongolia, a lobby group that counts Oyu Tolgoi as a member, alongside Australian companies such as Orica, Worley, Aspire Mining and the Australian embassy to Mongolia.
Similar charges, which relate to matters of process rather than any suggestion of corruption, have been filed against another signatory to the Dubai agreement and former Oyu Tolgoi director Ganbold Davaadorj.
The charges against both men are similar in nature to those filed against former Mongolian prime minister Chimediin Saikhanbileg,
Rio and Turquoise Hill warned in July 2019 that expansion of Oyu Tolgoi was running between 16 and 30 months later than the most recent guidance, and the cost of construction was likely to be between $US1.2 and $US1.9 billion higher than previous guidance.

Turquoise Hill refined that guidance last week, saying the delays would be between 21 and 29 months late, with the company's best guess at this stage being a delay of 25 months.
The cost blowout range was tightened to between $US1.3 billion and $US1.8 billion, with $US1.5 billion being the company's best guess at this stage.
If Turquoise Hill is correct on those estimates, the construction cost would amount to $US6.8 billion excluding the cost of the power station, and first sustainable production would occur about the middle of 2023.
In 2012, Rio was expecting to have the Oyu Tolgoi underground expansion complete and in production by 2015.

Mongolia evacuates 261 nationals from Europe over COVID-19 pandemic

ULAN BATOR, May 3 (Xinhua) -- A total of 261 Mongolian nationals have been evacuated on a chartered flight from COVID-19-hit European countries, the country's State Emergency Commission (SEC) said Sunday.
The flight landed in the Chinggis Khaan International Airport in the capital city of Ulan Bator on Sunday morning, with 261 passengers onboard, the SEC said in a statement.
The 261 passengers belonging to at-risk groups, including pregnant women, the elderly, children and sick people, will be isolated at designated facilities for 21 days, it added.
The passengers arrived in the western German city of Frankfurt from 13 European countries before boarding the flight, according to the Mongolian Foreign Ministry.
The Asian country has evacuated more than 2,600 nationals from abroad on chartered flights since mid-March.
Mongolia reported 39 cases of COVID-19 as of Sunday. All confirmed cases, including four foreign nationals, are imported.
There have been no local transmissions reported in Mongolia so far. Enditem

Mongolia receives anti-virus supplies from China

ULAN BATOR, April 28 (Xinhua) -- Mongolia received medical supplies from north China's Inner Mongolia Autonomous Region on Tuesday in the fight against the COVID-19 outbreak.
The medical materials included 100,000 masks, 1,000 protective suits and 200 boxes of testing kits.
"As a result of the Mongolian government's optimal measures to prevent the spread of COVID-19, Mongolia has become one of the few countries where no cases of the coronavirus from local transmission has been reported. This is a great achievement," Chinese Ambassador to Mongolia Chai Wenrui said in a speech during the handover ceremony of the donation.
"In addition, no cases of COVID-19 infection imported from China has been reported in Mongolia. We are ready to cooperate with the Mongolian side to maintain the situation," Chai said.
Mongolian Health Minister Davaajantsan Sarangerel expressed her deep gratitude to the Chinese government and people for the donation.
As of Tuesday, a total of 38 COVID-19 cases have been reported in Mongolia.
All confirmed cases, including four non-nationals, are imported, according to the country's National Center for Communicable Disease. Enditem

Mongolia cancels Tavan Tolgoi’s $1 billion IPO plan

Mongolia has cancelled an executive order to fund its giant Tavan Tolgoi coal project through an international initial public offering (IPO), citing “political distortions” and the current dire state of global financial markets.
Erdenes Tavan Tolgoi (ETT), the state-owned company that holds the license to the deposit, had been working with an adviser for preparations of the planned IPO, which included a listing in the Hong Kong Exchange (HKEX).

The stock market launch, which could have raised more than $1 billion, was meant to help fund the massive project and related transportation infrastructure to deliver 30 million tonnes of coking coal a year to markets in China and beyond.
The cancelled plan was at least the third effort to raise money to develop the Tavan Tolgoi mine after international partnerships failed in 2011 and 2015. Mongolian lawmakers in 2018 approved a plan to sell up to 30% of Tavan, which is the country’s second-largest mining investment after Rio Tinto’s Oyu Tolgoi copper-gold-silver operation.
Tavan Tolgoi, which means “five hills” is located near Mongolia’s southern border with China. It has estimated reserves of more than 7 billion tonnes of coal, more than one-third of which is high-grade hard coking coal, according to its website.

Mongolia to send meat to Russia to help combat COVID-19

ULAN BATOR, April 23 (Xinhua) -- Mongolia will send meat and meat products worth 1 million U.S. dollars to Russia to help combat the COVID-19 pandemic, Mongolian parliament speaker Gombojav Zandanshatar said Thursday.
Zandanshatar made the remarks when meeting with Russian Ambassador to Mongolia Iskander Azizov, according to the parliament's press office.
"Our country's National Security Council has decided to send meat and meat products worth 1 million U.S. dollars to Russia's Irkutsk region and the Republic of Buryatia. We hope that the non-refundable aid will help prevent and combat the spread of COVID-19," Zandanshatar said.
The Russian ambassador expressed his deep gratitude to the Mongolian side and said that he would immediately inform the authorities of the two Russian regions. Enditem

Kincora drilling underway at brownfield Trundle project, NSW


World Bank Group plans $12m loan to Mongolia microfinance company

Transcapital earmarks funds for small companies and rural areas

The World Bank's private sector arm, International Finance Corporation, may extend a syndicated senior loan facility equal to $12 million in local currency to Mongolian microfinance company Transcapital.
The deal would be IFC's first investment using the Mongolian tugrik and its first business with a non-banking financial institution in the country, IFC said in a statement.
With the deal, Transcapital will be able to provide more access to finance for small enterprises and underserved individuals, especially women and people living outside the capital of Ulaanbaatar, IFC said.
It is also expected to help develop Mongolia's microfinance sector by allowing small institutions access to midterm funding in the local currency and by strengthening institutional capacity.
IFC said it will also help Transcapital obtain loans from international investors.
"Such funding is expected to be further curtailed given the impact of the ongoing COVID-19 crisis on global markets and on the Mongolian economy," the statement added.
Transcapital is the largest microfinancer in Mongolia, according to the World Bank unit.
The company is majority-owned by the Namsraijav family. Transcapital founder Zorigt Namsraijav and CEO Altanzul Zorigt hold 93% of the company.
Zorigt Namsraijav is also the founder of the Tuushin Hotel and Tuushin Group, operator of the country's first freight forwarder.
IFC says in another statement that it is involved in all key sectors of the local economy, from financial services and agribusiness to infrastructure and sustainable mining.
Since starting Mongolian operations in 1997, IFC has invested more than $470 million in the country.
IFC's other investment in the financial sector is Khan Bank, the country's largest lender. It recently extended a $70-million bond and debt package to the bank.


Mongolia confirms 13 more Covid-19 cases

ULAN BATOR: Mongolia on Tuesday (April 14) confirmed 13 new cases of Covid-19 (coronavirus), bringing the total in the country to 30.

"The NCCD tested 502 suspected cases of Covid-19 on Monday and 13 of them were positive," Dulmaa Nyamkhuu, head of the National Centre for Communicable Disease (NCCD), said at a press conference.

The 13 patients are Mongolian students who have recently been evacuated from Russia on buses via Altanbulag border point amid the Covid-19 pandemic, according to the NCCD.

They all are now at isolation wards in the NCCD in the country's capital city of Ulan Bator.

All the 30 confirmed cases are imported ones and five of them have recovered, said the NCCD.

A French national tested positive for the virus on March 10, becoming the first case in Mongolia. - Xinhua/Asian News Network

55 Mongolians Finally Return Home after Mongolia Provides Flight

A group of 55 Mongolians who had been staying in South Korea after their home country refused their repatriation have finally returned. 

According to legal circles on Thursday, the group went back aboard an extra flight on Wednesday. Some of the group conducted a hunger strike directed at the Mongolian Embassy in South Korea, while being kept in a detention center.

The Mongolians were initially scheduled to be repatriated on April 2 but the plan was scrapped after Mongolia unilaterally cancelled their reserved flights due to the COVID-19 pandemic. 

Mongolia had refused entry of its nationals residing abroad since the end of February as part of efforts to block imported coronavirus cases. 

Mongolia later reversed its decision and provided a flight to bring home the 55 Mongolians once they all obtained documents confirming they tested negative for COVID-19. The group paid for the tests themselves.

Mongolia is not the only country refusing to repatriate its own citizens. Vietnam has also refused to let in its citizens since March 6, and Thailand has demonstrated reluctance in repatriating its nationals.

The World Bank Approves $26.9 Million for Mongolia’s COVID-19 Emergency Response

ULAANBAATAR, April 2, 2020—The World Bank’s Board of Executive Directors today approved $26.9 million for the Mongolia COVID-19 Emergency Response and Health System Preparedness Project to meet emergency needs in the face of the pandemic and to better prepare for future health crises.
The project will address the immediate needs in response to COVID-19 such as training for emergency care doctors, nurses and paramedical staff; purchase of medical and laboratory equipment and supplies as well as build COVID-19 diagnostic capacity in Ulaanbaatar and all provinces. It will also rehabilitate health facilities; institute infection control measures and training across health facilities; and support public health information and communication campaigns for disease prevention and management.
Although community transmission has not been reported in Mongolia, the country remains at high risk for COVID-19 outbreak spread. The government has made addressing the COVID-19 pandemic an immediate priority.
“The global COVID-19 pandemic clearly calls for strengthening the preparedness and resilience of health systems to respond to such crisis situations,” said Andrei Mikhnev, World Bank Country Manager for Mongolia. “This emergency operation will not only provide immediate support to address the COVID-19 pandemic, but will also benefit Mongolia’s health sector in the longer term to become more resilient to future health emergencies.”  
The project funding comprises a US$13.1 million credit from the International Development Association (IDA) and a $13.8 million credit from the International Bank for Reconstruction and Development (IBRD), allocated as part of the World Bank Group’s $14 billion COVID-19 fast-track financing package. Retroactive financing up to US$4.2 million of the total amount will be available for eligible expenditures incurred by the government from January 1, 2020.
World Bank Group COVID-19 Response
The World Bank Group is rolling out a $14 billion fast-track package to strengthen the COVID-19 response in developing countries and shorten the time to recovery. The immediate response includes financing, policy advice, and technical assistance to help countries cope with the health and economic impacts of the pandemic. The IFC is providing $8 billion in financing to help private companies affected by the pandemic and preserve jobs. IBRD and IDA are making an initial US$6 billion available for the health response.  As countries need broader support, the World Bank Group will deploy up to $160 billion over 15 months to protect the poor and vulnerable, support businesses, and bolster economic recovery.


In Ulaanbaatar
Indra Baatarkhuu
+976 7007 8207

Rio faces investor rebellion over Oyu Tolgoi

Rio Tinto (ASX, LON, NYSE: RIO) is facing a new setback at its giant copper project in Mongolia with a large investor demanding a shakeup at the Oyu Tolgoi operation over what it claims is “a massive devaluation” of the asset.
US hedge fund Pentwater Capital wants the designation of a new independent director to represent the interests of minority shareholders at Turquoise Hill Resources (TSX, NYSE:TRQ), the Rio-controlled company that operates the mine. 
Naples, Florida-based Pentwater also wants other shareholders to be able to nominate three more directors.
“Turquoise Hill’s board and management have failed to effectively oversee Rio Tinto, and intervene in the abuse of control and refusal to make complete and truthful disclosure by Rio Tinto of the Oyu Tolgoi Project,” Pentwater said in the statement.

The fund, which has a 9% interest in Vancouver-based Turquoise Hill, said it had become increasingly worried at the mismanagement of an underground expansion of the mine and the timing of market disclosures.
“The tangled web that has been woven between Rio Tinto and Turquoise Hill has resulted in a lack of corporate governance controls, systemic disregard for the interests of minority shareholders, a sustained period of false and misleading disclosures and irreparable harm to the interests of all Turquoise Hill stakeholders,” Pentwater said.

Mongolian muddles

Investor activism is just the latest in a series of recent headaches for Rio as it builds what would rank as one of the three largest copper mines in the world when operating at full tilt – now expected to be by 2025 at the earliest.
In January 2018, the country’s government served Oyu Tolgoi with a bill for $155 million in back taxes —  the mine’s second tax dispute since 2014. The company said at the time the charge related to an audit on taxes imposed and paid by the mine operator between 2013 and 2015.
Shortly after, the mine had to declare force majeure after protests by Chinese coal haulers disrupted deliveries near the border.
The situation prompted Rio’s chief executive Jean-Sebastien Jacques to visit Prime Minister Ukhnaagiin Khurelsuk to discuss how to build “win-win” partnerships. The trip was followed by the company’s announcement that it was opening a new office in the country, focused on exploration and building local relationships.
The issue resurfaced later, when a group of Mongolian legislators recommended a review of the 2009 deal that launched construction of the mine. It also advised revoking a 2015 agreement allowing for an underground expansion. 
In December, Mongolia’s parliament unanimously approved a resolution that reconfirms the validity of all the Oyu Tolgoi mine-related agreement, bringing the 18-month review to a close.

Behind schedule and over budget

Rio warned last year that the project located in the South Gobi desert near the border with China would take 16-30 months longer than expected and would cost as much as an additional $1.9 billion to the initial $5.3 billion earmarked.
Last week, Turquoise Hill poured more cold water on the plan, saying that it would need at least another $4.5 billion to finish the project.
Once completed, the expansion is expected to lift Oyu Tolgoi’s production from 125,000–150,000 tonnes in 2019 to 560,000 tonnes at peak output, targeted for 2025.
The giant deposit, discovered in 2001, is one-third owned by Mongolia’s government and two-thirds held by Turquoise Hill. Rio has a 51% stake in the Canadian miner.


PENTWATER FILES PROXY CIRCULAR FOR SHAREHOLDERS OF TURQUOISE HILL RESOURCES LTD. (TSX:TRQ) (NYSE:TRQ) Issues Letter and Proxy Critical of the Treatment of Minority Investors in Turquoise Hill by Company’s Current Board and Management and its Controlling Shareholder Rio Tinto plc.


Issues Letter and Proxy Critical of the Treatment of Minority Investors in Turquoise Hill by Company’s Current Board and Management and its Controlling Shareholder Rio Tinto plc.

  • Turquoise Hill shareholders have suffered massive value destruction at the hands of Rio Tinto, which operates the Oyu Tolgoi Project (allegedly under the watchful eye of Oyu Tolgoi's majority owner, Turquoise Hill) while also being the majority shareholder of Turquoise Hill.
  • Turquoise Hill’s board and management have failed to effectively oversee Rio Tinto, and intervene in the abuse of control and refusal to make complete and truthful disclosure by Rio Tinto of the Oyu Tolgoi Project.
  • Turquoise Hill’s officers are a revolving door of Rio Tinto executives, employees and board nominees, who are rotated into senior positions at Turquoise Hill and tasked with "negotiating" material agreements with Rio Tinto on behalf of Turquoise Hill.
  • Rio Tinto exercises effective control over the selection and nomination of Turquoise Hill’s "independent directors", without any meaningful input from Turquoise Hill's minority shareholders.
  • Turquoise Hill's directors lack sufficient independence from Rio Tinto, and their financial incentives are not aligned with the interests of Turquoise Hill or its minority shareholders.
  • Shareholders are urged to vote using only the GOLD proxy now for Pentwater's meaningfully independent, experienced and motivated director nominee and its minority shareholder representation proposal to restore accountability at Turquoise Hill.
  • Vote on the GOLD proxy or VIF and submit prior to 5:00 p.m. (Eastern time) on Thursday May 7, 2020 or earlier to permit it to be delivered to the Company in time to be counted.
NAPLES, Fla., April 02, 2020 (GLOBE NEWSWIRE) -- Pentwater Capital Management LP ("Pentwater"), a long-term supportive investor and the largest minority shareholder of Turquoise Hill Resources Ltd. ("Turquoise Hill" or the "Company") (TSX:TRQ) (NYSE:TRQ), owning, together with its affiliates and associates, approximately 9.09% of the Company's issued and outstanding common shares, today filed a proxy circular, GOLD proxy card, and issued a letter to shareholders of Turquoise Hill in connection with the Company's upcoming annual and special meeting of shareholders scheduled for 9:00 a.m. (Eastern Time) on May 12, 2020 (the "Meeting") in the Saint-Laurent 5 room of Hôtel Bonaventure Montreal, located at 900 Rue de la Gauchetière Ouest, Montreal, Quebec, Canada.
Since Rio Tinto plc. (NYSE:RIO:US)(LON:RIO:L)(ASX:RIO:AX) ("Rio Tinto") gained control of Turquoise Hill in 2012, Pentwater has grown increasingly alarmed at the significant value destruction and mismanagement of and failure to make material disclosures about the Company and its material asset – the Oyu Tolgoi Project – at the hands of Rio Tinto and its hand-picked Turquoise Hill officers and directors. The tangled web that has been woven between Rio Tinto and Turquoise Hill has resulted in a lack of corporate governance controls, systemic disregard for the interests of minority shareholders, a sustained period of false and misleading disclosures and irreparable harm to the interests of all Turquoise Hill stakeholders.
The Oyu Tolgoi Project is one of the largest known copper and gold deposits in the world, containing ore that is six times the average-industry grade. If managed and operated properly, the Oyu Tolgoi Project should reap exceptional benefits for all stakeholders – including the people and government of Mongolia and the majority and minority shareholders of Turquoise Hill.
It is time to take action against the current culture of entrenchment, value destruction and misconduct at Turquoise Hill. At the Meeting, Pentwater is seeking the support of Turquoise Hill shareholders to vote using the GOLD form of proxy or VIF FOR:
  • the election of the highly qualified and meaningfully independent director nominee, Matthew Halbower, Chief Executive Officer and Chief Investment Officer of Pentwater, to the board of directors of the Company; and
  • the adoption of a shareholder proposal, which would provide minority shareholders of Turquoise Hill with the exclusive right to nominate and elect three of seven directors to the board of directors of the Company.
Turquoise Hill shareholders have the opportunity to initiate much-needed change, to restore accountability and to safeguard minority shareholder interests in Turquoise Hill. By electing Matthew Halbower to the board of directors of the Company, minority shareholders will for the first time have a director representing them whose interests are fully aligned with theirs, rather than Rio Tinto's, which is exemplified by Pentwater's significant investment in Turquoise Hill.
To ensure your vote is counted, please vote using the GOLD form of proxy or GOLD VIF prior to 5:00 p.m. (Eastern Time) on Thursday, May 7, 2020. You should discard any management proxies or VIFs that you receive.
Shareholders are urged to read the full text of Pentwater's proxy circular and letter to shareholders, which are available under Turquoise Hill's issuer profile on SEDAR at

About Pentwater
Pentwater is a private investment firm focused on investing in event driven strategies with expertise across the capital structure. Founded in April of 2007, the firm’s experienced team uses a dynamic, disciplined approach to mitigate risk and optimize returns.
The head office of Pentwater is located at 1001 10th Ave South, Suite 216, Naples, FL 34102.
For further information contact:
MacKenzie Partners, Inc.
Daniel Burch – 1-212-929-5748
Jeanne Carr – 1-917-648-4478

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