Altan San Securities - Mongolia Investment - Minister D.Zorigt: The main version is ready to submit to the discussion

Minister D.Zorigt: The main version is ready to submit to the discussion

Yesterday, the MPRP group at SGK held a meeting and during this meeting, Minister D.Zorigt made disclosure regarding the current development on OT agreement.
Q: You presented the comments and findings of the Standing Committee on the Economy to MPRP group members. What
were the comments and reactions of the party group members? Minister D.Zorigt: In accordance with the comments and findings of the Committee, the signing sides are added. Ivanhoe Mines Inc Co.,Ltd was the sole signing side before, but the signing sides now include Rio Tinto International Holding and Ivanhoe Mines Canada. The term of building investment is now set at two years, because of the criticism from MPs on fund raising length. Moreover, the clause is added that within five years’ time after the raising of funds, the factory must be built and operating at its full capacity.
Q: The issues of Energy, Roads and Transportation were unclear. What will be the answer?
Minister D.Zorigt: As for the energy issue, it is true that Mongolia has no resources to provide even though it is stated that the Mongolian side will provide energy after the realization of the project. There was criticism in relation to this issue. Therefore, we added three more resources. Alternatively, the investor side is to build a power station within four years or to receive energy from a third source. Another clause has added a central power network that would provide the energy.
As for the roads, there was the criticism that Mongolia will take care of maintenance only. According to this finding, the agreement will be built with the Ministry of Roads, Transport, Construction and Urban Development and its maintenance cost will be provided by the project. As for the water supply issue, local needs, including herders and local usage, will be provided with the water resources of the project.
Q: OT monitoring issue is inevitable. What organization will be in charge?
Minister D.Zorigt: The annual auditing will be made on the project and the report will be submitted to the state institute.
Q: The main version is ready to submit to SGK. What would you say about it?
Minister D.Zorigt: Yes, it is. The newly edited version has clauses that ownership is 34%, full tax imposed, pre-payment increased. The Standing Committee made a proposal to own 34% without investment contribution, to increase pre-payment, and to not give a tax waive. In relationship with this proposal, the new version is submitted for the discussion.
Q: The president’s 55% proposal omitted the ownership of 34%. Also, public discussion is all about 55% of profit share. So, is the 34% ownership included in the version of 55% of profit share?
Minister D.Zorigt: According to the new version, the pre-payment is increased to 225 million US$ with less interest rate and the profit share of 55%. More clear and precise disclosure will be made after detailed presentation to the party groups at SGK.
Q: Does the new version include the state ownership?
Minister D.Zorigt: No.
Source: www.business-mongolia.com

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