Erdenes Tavan Tolgoi (ETT) was planning to release an IPO on international stock exchanges this year, but it was postponed indefinitely in January due to the company’s financial difficulties.
According to Minister D.Gankhuayg, related ministries and specialists are already working to solve the railway-related issues facing the giant Tavan Tolgoi mine so as to make full use of the mine. Currently, ETT, which operates the Tavan Tolgoi mine, is in discussions with Chinese state-owned steelmaker Aluminium Corp. (CHALCO) to secure a deal that serves the interests of both parties.
“There are things that need to be clarified in the current agreement,” said Minister D.Gankhuyag. Currently, Erdenes Tavan Tolgoi owes around 186 million USD worth of coal to CHALCO. The mining minister added that if Mongolia adheres to the current supply agreement, Mongolia would face a loss of 50 to 60 million USD.
The mining minister also noted that foreign investment inflow decreased significantly in 2012 from its 2011 level. In 2011 foreign investment reached 1.6 billion USD, but was only 630 million USD in 2012.
Minister D.Gankhuyag predicted that when the construction of the oil refinery and a new thermal power plant begin in the second quarter of this year, these projects will bring in more investment.
The Head of the Petroleum Authority’s Department of Production and Technology, A.Enkhjargal, informed the press on Wednesday that China would supply Mongolia with 10,000 tons of fuel starting next month at a price 100 to 150 million USD less than that of Russia.
He added that increasing the capacity of border authorities and customs will enable fuel imports to increase to 20,000 tons by September.
Mongolia is fully dependent on fuel imports for its domestic needs. Russia is Mongolia’s top fuel supplier.