Mongolia’s mineral wealth subject of 19th Northeast Asia Economic Forum

Mongolia’s State House was the venue for the Forum

On August 26-27, the Nineteenth Annual Meeting of the Northeast Asia Economic Forum (NEAEF) was held at the State House. More than 100 representatives of government, businesses, experts from Russia, China, Republic of Korea, the US and Japan attended the Forum and discussed matters including regional economy matters of infrastructure, energy minerals, and how to finance them.
President Elbegdorj sent a message addressing participants of the forum. The message read, “There are many disengaged opportunities and uncovered capitals in northeast Asia. We are here to use and discover it not only for the sake of the region but for the world as well. There is much opportunity to create wealth if financial and investment reserves, technical and technological progresses, leading management and natural resources are integrated coherently. To do it, it would be right to learn from the experiences of Europe and Southeast Asia that are actively integrating, and encourage steps to implement it. I think that the Northeast Asian Development Bank that you are now discussing about is one of such steps.

Furthermore, I believe special attention should be paid to creating soft and hard infrastructure which will connect capital such as in energy, road, transport, banking and financing, environment and tourism. It also reads, “Mongolia, a part of Northeast Asia, has one of the largest minerals reserves in the world. It is intended to put the reserve into economic circulation, develop industrialization relied on it, and implement mega projects of infrastructure including energy and transport. A professional organization estimated that Mongolia’s economy would grow almost 3-fold by 2015.
During this period, Gross Domestic Product per capita will raise USD 5,000 at minimum just to start.” Mongolia has been actively participating in Forum activity since it was first established in 1991 and the 7th NEAEF was organized in Ulaanbaatar in 1997. Government and experts of the host country express their positions and ideas.
Issues such as how significant giant mining projects which were decided by Mongolia’s government are on the regional scale and attention should be given in order to implement the projects with mutual benefits were commonly discussed because this time the Forum was organized in Mongolia. In conjunction, Deputy Parliament Speaker N. Enkhbold attended the Forum and introduced relevant State policy for the minerals sectors and actions being taken. He said that last year, the Oyu Tolgoi Investment Agreement was established, extraction will start in 2013 and Mongolia’s parliament recently made a decision to put the Tavan Tolgoi coal mine. into economic circulation. Moreover, he stated intentions that 10 percent of the deposit will be allotted to citizens as a share, 10 percent will be sold to domestic companies and 30 percent will be traded at international markets.
Representatives from some companies including Erdenes MGL and Olon Ovoot gave presentations.
For instance, G. Temuulen, Erdenes MGL Company’s executive director introduced that according to the Oyu Tolgoi co-exploitation agreement established with Ivanhoe Mines Mongolia Inc, investment worth USD 4 billion will be made. The extraction will be conducted using state-of-theart technology. The exploitation period is 50 years and currently, construction works are underway. The open pit is planned to exploit starting in 2012.
From 2013, it will have the potential to produce 6 million tonne of concentrate daily and bring it to market. It has a coal reserve of 6.5 billion tonne, of which 4.6 billion can be used as fuel and the remaining part as coked coal,so expensive in the world. In connection with the exploitation of the Tavan Tolgoi deposit, infrastructure issues came up. Parliament adopted a policy document regarding the Tavan Tolgoi deposit exploitation. It asserts that a railroad will be constructed between Tavan Tolgoi and Sainshand in the first stage and processed coal will be exported to foreign markets. By doing so, it will limit exports of raw coal and energy consumption will increase in connection with exploitation of the deposit. Thus, the issue to exploit the Shivee Ovoo brown coal deposit is being discussed. It will require a considerable investment. Some foreign companies expressed their interest to invest. We will consider mutual-beneficial activity between investors and the owner. Some participants reported the difficulties they face in order to put minerals into economic circulation in regional countries. For Russia, extraction of mining companies decreased in the last two years and suffered much loss due to the economic crisis. It connects with drops and instability of metal rates in the world market. Now, it necessitates attracting investors in order to increase extraction of mineral resources and introducing new technology to production. On the other side, cooperation with other countries is very important. Russia is much interested in attracting investment from Northeast Asian countries.
Participants also underlined that long-term economic and political favorable environment is a key to attract investors and develop the mining sector intensively.
source: The Mongol Messenger