President Ts.Elbegdorj visits South Gobi mine sites and soums

President Ts.Elbegdorj visits South Gobi mine sites and soums
President Ts.Elbegdorj meets with soum citizens to answer questions of local concern
On January 19-21, President Ts.Elbegdorj made a working trip to Omnogobi Aimag. First, the President saw operations of the ‘Tavant Tolgoi’ Company located in Tsogttsetsii Soum. The company is locally owned with 51 percent of shares owned by Mongolia and 49 percent by about 170 shareholders. Later, the President went to the ‘Erdenes Tavantolgoi’ company that was established on December 23, 2010. It employs a total of 262 workers. According to the company’s director L.Enebish, greater constructional works are planned to construct a concentrating plant, water system, paved road and residential town for 1,000 people. He added that the company started exporting coal on August 4, 2011 and has extracted one million tonnes of coal so far. “The main difficulty is the transportation issue. It necessitates starting railway construction and urgently laying a paved road. Also the border checkpoint should have many gates because loaded coal truck waste much time in a long queue at the border check-point. In collaboration with other companies, we have made some efforts to make it have more gates,” he said.

Minerals and Energy Minister D. Zorigt said, “Even when more roads are constructed, there will still be problems of transportation. Therefore, we need to start construction of a railway as soon as possible.”

President Elbegdorj said that they need to resolve infrastructure issues quickly. In particular, construction of an auto road and railroad, along with intensifying operations of mining companies rely on the Tavan Tolgoi deposit. The transportation-related issue was touched upon most during the working trip to Tsogttsetsii and Khanbogd soums of Omnogobi Aimag. Last year, Energy Resource LLC constructed a 245km paved road from its mine to the Gashuun Sukhait border check-point. It contributed much to ease the transportation of coal. However, the road is unable to bear all capacity and they need to construct more paved roads and a railroad as soon as possible.

The president was critical about the construction process of the railroad. “When I asked about it in 2009, I was told that construction would be started after 2 years. However, there is no rail here. By using the reason of raising funds, it is taking too much time and causes economical and natural losses.” A passage way for animals should be planned while constructing both the railroad and auto road, said the President. The same day, President Elbegdorj got acquainted with activities of the Ukhaa Khudag mine of the ‘Energy Resource’ LLC. The mine started operations in 2009, put its coal processing plant into operation, made an IPO on the Hong Kong Stock Exchange, constructed an 18 megawatt electrical power plant, and  implemented many construction works. The coal processing plant is capable to process 5 million tonnes annually and has the technology to recycle 94 percent of its used water. Construction of the 18 megawatt electrical power plant not only ensures the supply of energy for the mining operations, but also for citizens of Tsogttsetsii Soum. The President was introduced to the coal processing plant, office buildings of the mine, the ‘Tsetsii’ apartment town and ‘Gallery’ town for workers.

So far, Energy Resource Company has invested about Tgs600 billion on auxiliary projects of the mine and infrastructure projects. It paid Tgs13 billion to the State Budget in 2009, and increased to Tgs120 billion in 2011.

Afterwards, the President held a meeting with local citizens of Tsogttsetsii Soum. To begin the meeting, the President briefly introduced five main directions of his activities as State Head.

On Friday, January 21 the President and accompanying officials came to the Oyu Tolgoi deposit. “At the coldest period of winter, great constructional works are underway here,” said G. Batsukh, Chairman of the Board of Directors of the Oyu Tolgoi Company. The Oyu Tolgoi Project is under the construction process. As a result of the project which is expected to be hugest mining construction in the world, Mongolia’s economy will grow by 36 percent in 2019. It is expected to invest Tgs7.7 trillion before the start of extraction. The concentrating plant will come into operation in the 3rd quarter of 2013 and it is now under the assembling process.

According to company authorities, the construction works attracted 65 companies from 38 countries as assistant executors; some 15 thousand workers are employed and 10 thousand of them are Mongolians.
Also, a contract was built for over 1,000 national suppliers, purchasing goods and services worth Tgs1.3 trillion. There are 12 infrastructure projects being implemented in the aimag and five of them are being executed by Mongolian companies. The Company made an investment worth Tgs110 billion in a training program that establishes vocational training and production centers and mining institutes in Dalanzadgad, Khanbogd, Darkhan and Ulaanbaatar. It also sponsors 200 students studying in domestic universities and 30
students studying abroad.

The authorities also introduced that natural rehabilitation will be made according to international standards. Its environmental policy completely conforms to the World Bank standard. The project is to introduce technology that demands the least amount of water consumption.
For infrastructure, 100km paved road to the southern border is being constructed and 220kwatt electrical lines are being erected. According to international standards, the airport and water pipe are being  constructed. Also, a sport hall and cultural complex worth Tgs2.6 billion are being built in the aimag center for citizens. A sport complex is being built in Bayan-Ovoo Soum with an investment of Tgs775 million.
The President highly spoke about the running construction and then asked the company to augment salaries of Mongolian workers and involve them in various trainings. Advising the Cabinet to pay attention to Mongolian workers, the President said the working schedule of Mongolians should consider providing them with comfortable living conditions. “It is important to erect an apartments’ campus for the workers,” he added.
The President also asked the company to study an opportunity to gather more national enterprisers who supply products to the OT Company.

The President and accompanying officials saw the construction process of a concentrating plant, the project field, open pit and shaft #2 from the observation stand, and a heavy load assembling workshop and settlement for workers.
Later, the President held a meeting with Khanbogd Soum citizens. Along with implementation of big mining projects and construction works, the population in the soum is increasing, which causes many problems to occur regarding mutual understanding between environment and infrastructure project implementers and local citizens. Therefore, citizens had words and queries for the President.

First, the focus of the discussion was the issue about the outlook for energy. As G. Batsukh, Chairman of the Board of Directors of the Oyu Tolgoi Project said, erection of electrical lines linking Oyu Tolgoi to Khanbogd Soum will be completed by next autumn and Tgs5.9 billion has been preliminarily budgeted. Minerals and Energy Minister D. Zorigt said, “A 220 Mega Watt electrical line is running from Mandalgobi to Tavan Tolgoi. From there, a line will be stretched to Oyu Tolgoi. A 300 megawatt electrical power station will be built in both Tavan Tolgoi and Oyu Tolgoi. The average term for building the station is 2 years. As it is needed to receive energy before the completion of the construction of power station, energy will be received from China.
The energy issue will be resolved this year if an electrical line is stretched here regardless of whether it comes from Ulaanbaatar or China.”

Citizen Batmonkh said, “I’m not saying that the Oyu Tolgoi project is wrong, but the state policy on mineral resources should be determined with a far-sight of 100 years at least. Rivers and streams are drying out and nature is deteriorating. With the current situation, it is very doubtful about the future existence of Khanbogd Soum. Pasturing and animal husbandry is devastated. There may be not any pasture area or even herders. There may be no one who herds animals 20 years from now. I can’t understand how mining is to be developed without resolving infrasture. The situation in Gobi is very hard. You looked at the soum center; it looks greenless. We need an auto road.

Senior citizen Tserenkhuu said, “Implementation of the Oyu Tolgoi Project is not fruitful for herders. State officials need to hear the words of herders and citizens. I think the meeting in the soum center will not give positive results. Look how life is there; livestock has become unhealthy and gold processing activities were made so close to our soum. I think you know how poisonous that is. Families living near the road can’t eat the meat of their livestock.”

Khanbogd citizens criticized and gave suggestions related to the Oyu Tolgoi project. They criticized that the Oyu Tolgoi project does not care about the health state of Mongolian workers, pays little to Mongolians, but higher to foreigners and apartments for workers are not built.
Officials gave relevant responses to the questions.




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