D.Zorigt: Foreign companies will agree to work as operators in Tavantolgoi

Sat, 6 Feb 2010 20:48:26

Minister for Minerals and Energy D.Zorigt speaks about the Tavantolgoi deposit.

PM S.Batbold has said the Tavantolgoi license will be fully owned by the State and investors will be given contract mining rights. How exactly will this be possible?

The license is held by the State and Erdenes MGL is negotiating with investors. The State will keep 100 percent of the license without selling any share of this, and foreign companies will make contracts with Erdenes MGL to mine coal.

Does this mean renting their services?

It is a new way of working followed in, say, Indonesia. It can be understood as working with private companies under a new relationship.

Does the 100 percent exclude the Ukhaa Khudag deposit’s license owned by Energy Resource?

Yes. The Government will retain full ownership of the license held by Erdenes MGL today.

Companies are generally interested in ownership. Will there be foreign companies willing to operate mines without owning them?

Yes, there will be.

Have you already talked to companies that are interested in this?

We are working on the terms. We are sure there will be companies agreeable to them.

Will they be from the 11 companies or consortiums who have already expressed interest in Tavantolgoi?

This number may increase or decrease.

Does this mean companies will be selected and be given rental rights?

There is no renting. The companies will operate under a contract to mine coal.

Does this mean the companies will pay fees to the State for mining coal? How much will the fees be?

We are working on the details.

Will all this be beneficial to Mongolia?

Yes, because the State will keep the ownership.

Will the Government participate in the mining and selling of the coal and in management?

Usually, companies holding operator rights and making large investments run the show themselves, according to their own practices. We will of course monitor and oversee the work.

Former PM S.Bayar had once stated that Russia and China could get 30 percent each of Tavantolgoi and domestic investors the remaining 40 percent...

He made no official statement to this effect. All suggestions will certainly be discussed by the political parties and the Government will present its final proposal to Parliament to take the ultimate decision.

Will an operator company be selected for each of the four licenses the Government holds?

There are several licenses. The issue will be settled for the whole Tavantolgoi project. There may be one or several operators.

When will this issue be settled?

It will be included in the agenda of the Parliament’s Spring session this April.

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