Ulaanbaatar/MONTSAME/ Prime Minister U.Khurelsukh and government members worked at Tavantolgoi coal mine in Umnugobi aimag and met authorities of ‘Erdenes Tavantolgoi’ JSC, ‘Energy Resource’ LLC and local-owned ‘Tavantolgoi’ Company.
During his working trip, the PM stated the Government would make a political decision on improving utilization of Tavantolgoi deposit very soon and make it considered at the parliament and discuss matters regarding TT railway, auto road and power plant at the Cabinet Meeting.
At the meeting, G.Battsengel, CEO of Energy Resource LLC, proposed to increase border checkpoints, through which coal could be transported. According to him, Energy Resource LLC is extracting in Ukhaa Khudag and Baruun Naran sections of Tavantolgoi deposit. Total production reserve is 509 million tons. The company built the first coal concentrating plant in Umnugobi aimag in 2011 and it is currently capable of concentrating 15 million tons of coal per year. So far, it has concentrated approximately 40 million tons of coal and presently exports its concentrated coal only. In addition, the company constructed and now operates 18MW Power Station.
“It needs to consider accurately if it is right to have a sole export gateway in the country. Present slow circulation of coal transportation at border checkpoint triggers increased cost of the supply, selling a ton of coal at around USD60. Last year, a sales income rose by 4-fold, reaching USD476 million. The company exported 4.4 million tons of concentrated coal, but utilizes just half of its full industrial capacity. If trucks jam at Gashuunsukhait border checkpoint is resolved and coal transportation resumes running normal, the company is able to double its operation. There are ready buyers, even beyond the border,” said G.Battsengel.
Afterwards, a report on state-owned ‘Erdenes Tavantolgoi (ETT)’ JSC was introduced by its acting director B.Gankhuyag. He highlighted that the company earned MNT80.1 trillion thanks to its active and efficient operations, and now has no external and internal debts. By doing so, the ETT has come into a start of the 1st stage to develop the deposit and implement a strategically important project. Preliminarily, it is possible to raise USD1 billion from investors in the international markets and/or within the project. Thanks to its accomplishments in 2017, a value of the deposit can be reached USD8 billion.
To start the 1st stage of its development, the ETT needs to intensify modernization of facilities and implementation of other projects and introduce advanced international technologies. Due to indispensable needs to concentrate coal, the ETT plans to commence a project of concentration plant and cooperation with Energy Resource LLC and plants abroad to produce concentrate.
A feasibility study was tentatively approved to establish a coal concentration plant with USD330 million and it aims at putting a plant with capacity of concentrating 1-5 million tons of coal into operation in 2018-2020.
Moreover, B.Gankhuyag said, “With its four licenses, the ETT JSC is valued at USD5 billion. Thus, it is entirely possible to raise USD1 billion by making IPO. Two weeks ago, the ETT registered 1072 shares of 2,511,000 shareholders on the balance of the ETT. In this regard, the company schedules to host a meeting of the shareholders on April 27 to modify its rules.”
Following the reports, the Prime Minister and Ministers of Road and Transport Development and Mining and Heavy Industry provided some resolutions and assignments. For instance, Minister of Road and Transport Development J.Bat-Erdene made a decision to stop disorderly issuance of ‘C’ permission of coal transportation to cross the border and issue the permission in case the extractor made a direct contract with a buyer.
Minister of Mining and Heavy Industry D.Sumiyabazar instructed the ETT to execute logistical works itself, recruit skilled personnel and bring Gashuunsukhait auto road project into a direct management of the ETT.
In the end, the PM assigned the authorities of coal companies to pay attention on health, safety and social issues of drivers who transport coal.