National companies unite to exploit Tavan Tolgoi “If government rejects the plan, we will never develop”

Mining operations for the Tavan Tolgoi deposit may be under the corporate management of over a thousand Mongolian companies

 Having considered that Mongolians themselves have the potential to exploit Tavan Tolgoi, a leading deposit in the world with its coal reserve; national companies founded ‘Mongolia 999’ LLC Initiators of this unification appealed Mongolians to join forces in order to be owners of this large deposit, whose reserve was preliminarily identified to be 6.4 billion tone, and pronounced the possibility of national companies to join by paying Tgs1 million regardless of their capability. Initiators named the company as ‘Mongolia 999’ by symbolizing an enrolment of 999 or more national companies in the company. In duration of 12 days until the day when unified national companies are to convene for the first time, 1,283 companies registered of which 1,206 companies deposited Tgs1 million in the account and affirmed their official enrolment. The number of companies interested in unification has exceeded the number that the initiators expected. The first meeting of the unified national companies, ‘Mongolia 999’ was held on May 6 and 7. The initiators consider that Mongolians have many years’ experience in coal extraction and have trained professionals. However, it is possible to import required techniques and technology and collaborate with foreign companies. ‘Mongolia 999’ intends to make its first investment with the Tgs1 million paid by each companies to raise money from international stock exchange.

“We Mongolians should manage this project which can feed Mongolia. However, it does not mean that Mongolians need to do everything. We will import techniques and technology and believe that a main manager and director should be a Mongolian company.
Government needs to allow this project and show its confidence in national companies. If it rejects the plan, we will never develop. It is the basic foundation for national companies to jointly manage a big project, develop, and become independent. If the private sector is not allowed to participate in big projects, development will never come,” said L. Ariunbold, head of the initiators’ working group and President of ‘Mongol Bazalt’ Group.One of the initiators, S. Odontuya, Sentosa Company Director, also noted that they request the State not to trouble their activity but create an environment for proper perations. Economists, Trade Unions, NGOs and politicians expressed their appraisals for nifications of national companies for cooperation of the big project. R. Sodkhuu, Mongolia’s Stock Exchange director said, “World history about the foundation of Stock Exchange, 500 years ago, was the same as today’s unification of Mongolian companies. I am happy that Mongolians, created a basis of Continued from page 1 development based on our confidence and money, and not with a bank loan.” He wished the company to become a capable national company to raise much money with no less than 27 foreign companies which raise capital at world stock exchanges with Mongolian wealth. S.Ganbaatar President of the Confederation of Mongolian Trade Unions said, “It has been a big progress that the government declared Tavan Tolgoi to be 100 percent state-owned. State property actually means that it is the property of the people. The State is an organization to make fruitful deals with people’s property.” Ts. Nyamsambuu, head of the Mongolian Employers’ Association said, “It is the first ever event that Mongolia’s employers and proprietors unified with their spirit. Their unification proves they have gained strength.”
Mongolian Employers’ Association reviewed that Mongolia’s Government made an intelligent decision to urgently resolve the issue of putting a main part of the Tavan Tolgoi coal deposit into economic circulation, and the Prime Minister’s appeal for national companies to participate in this process has been an important event which inspired national businessmen. Later in April, government deliberated drafts of bid documents to select an investor for the Tavan Tolgoi deposit and a draft investment agreement is to be built with the selected investor and decided to submit for Parliament’s consideration after introducing to the National Security Council. The investment agreement will be established in three parts; Tavan Tolgoi deposit’s mining license holder and State-owned company ‘Erdenes-MGL’, an investor company (consortium) to be selected from the tender, and the Government of Mongolia. Currently, Vale (Brazil), Extrata (Switzerland-Australia), a consortium of Peabody Energy (USA) and Shenhua Energy (China), Gindal Steel and Power (India), a consortium of Japanese companies led by Itochu, a consortium of 11 South Korean companies, Mitsui & Co (Japan), Erdos Chinglon Coal (China), and Russian Railway (Russia) and others have introduced their proposals to the working group. Government intends to receive an advance payment of USD1 to 1.5 billion from the investor. source : "The Mongol Messenger" newspaper