The first negotiation meeting to establish a strategic investment agreement between the Mongolian government and the three-party consortium selected as strategic investor to cooperate on operating the Tavan Tolgoi deposit started as scheduled, on January 5.
The selection of the three-party consortium of China Shenhua Energy Co Ltd of China, Sumitomo Corporation of Japan, and Energy Resources LLC of Mongolia as the Tavan Tolgoi tender winner was announced on December 22, 2014.
During the meeting, CEO of Erdenes Tavan Tolgoi JSC Ya.Batsuuri informed the attendees of the current financial status and operations at the Tavan Tolgoi deposit. In addition, Executive Director of Mongolian Railway P.Batsaikhan presented essential information regarding current progress in the construction of a railroad between Tavan Tolgoi and Gashuun Sukhait, contractors in charge of the construction, and relevant financial issues.
On behalf of the consortium, Deputy CEO of Energy Resources LLC L.Oyunbat introduced information regarding the strategic investment agreement, including the contents of the agreement and international standards to be adhered to in the agreement.
Attending the negotiation meeting, the Mongolian side was represented by head of the Tavan Tolgoi tender working group and Minister of Mongolia M.Enkhsaikhan, Minister of Mining R.Jigjid, Minister of Roads and Transportation N.Tumurkhuu, and other members of the working group. The investor’s side was represented by CEO of Energy Resources LLC G.Battsengel, Deputy CEO of Energy Resources LLC L.Oyunbat, Board Chairman of China Shenhua Overseas Development and Investment Co., Ltd Shao Junjie and Vice President Zhou Tienjun, and General Manager of Sumitomo Corporation’s Ulaanbaatar Office Hiroto Fujiwara and Sumitomo’s Advisor to the General Manager of Mineral Resources Division No.2, Coal Department, Keiji Kiribuchi.
In developing the deposit, the consortium will invest in the form of project funding, which is a type of investment designated for attracting international banks and financial institutions to a project. The parties agree that all affiliated agreements and negotiations will be carried out transparently, as required by international standards and banks.