For those who don't know, what I'm talking about, last June before the parliamentary election, Mongolian government, led by then-ruling Democratic Party refused its right to buy the shares from Russian side and permitted "Mongolian Copper Corporation" previously unknown entity to buy the shares.
Since its start in late 1970s, Erdenet Mine was joint venture between then Soviet Government and Mongolian government. Then in early 1990s, when Soviet Union collapsed and its successor, Russia in the middle of chaotic new start, Mongolia managed to increase its share to 51%.
It is no secret that Erdenet mine has been a place for Mongolia's famous and powerful and politically connected to come and run and fill up their and family pockets.Influential members of both Democratic and People's Parties took turns at helms of Erdenet mine in the past. Erdenet was and still is important cash-cow for politically connected and powerful of Mongolia.
Russia said it sold its 49% shares Erdenet mine and Mongolrostsvetmet, non-ferrous producer to Mongolian Copper Consortium for $ 400 mill dollars and received the payment. It seems, Russia was happy with the deal and all-mighty Putin blessed it. Russians didn't express any doubt or complaint when they got rid of one of most important physical ties of Mongolia-Russia bilateral relations.
Now ruling Mongolian People's Party criticized the deal for lack of transparency and said it is deliberately organized by previous Democratic Party led government to benefit powerful local business interest.
Radnaased, chairman of the Parliamentary working group to investigate the deal said on Tuesday the deal was a purchase of public property using public money for private company.
Conclusion and recommendation of the working group presented for the public and media shows that Trade and Development Bank of Mongolia lent millions of dollars loans to companies controlled by D.Erdenebileg and then, these companies re-lent these funds to "Mongolian Copper Consortium" .
For these complex financial transactions and lending and borrowing, non-existing or immaterial collateral such as "future revenue source", "Power plant to be built in Gobi"have been used.
Now, the working group recommends that Government of Mongolia take back the 49% share from the private company.
Speaker of the Parliament said he supports that Mongolian state take back the shares.
We'll follow up this case in our next story.