The Government of Mongolia confirmed that it had delivered a proposal to annul the Southern Region Power Sector Cooperation Agreement (SRPSCA), which was signed in 2014.
The 2009 Oyu Tolgoi Investment Agreement between the Government and Rio Tinto states that the Investor will, within 4 years of Commencement of Production, secure its total power requirements for the OT Project from three sources within Mongolia.
In accordance with the provision 7.3, Oyu Tolgoi was liable to secure its energy need from domestic sources starting from July, 2017. However, the signing of the Southern Region Power Sector Cooperation Agreement /SRPSCA/ on August 14, 2014 made it unnecessary to comply with the above provision. Oyu Tolgoi has been importing energy from the People’s Republic of China, paying USD 160 million annually.
“The 2009 Investment Agreement was approved by Parliament, therefore amendment to the Agreement must be discussed by the Parliament as well. But the 2014 Agreement was signed illegally without discussion by the Parliament.
The Energy Minister also addressed the ongoing inaccurate media reports concerning alleged cancellation of project and said “Tavan Tolgoi Power Project is not cancelled.”
On the other hand, Project Director Mr D.Batbileg reported that the project was running normally. “The feasibility study has been completed, and the construction works are ready to commence this July” he said. If the construction works begin in 2018, it will wrap up in 2021. The Tavan Tolgoi Power Project /TTPP/ is worth USD 1 billion.