Coalition demands to revoke Oyu Tolgoi deal

A week after !11e demand to review Oyu Tolgoi investment agreement, issued by Mongolian People's Revo­lutionary Party, Mongolian Natimal Democratic Party, Civil Will-Green Party and Mongolian Green Party, the coalition held a press conference last friday and demanded to revoke the OT contract on eight basis. According to the coalition, Mon­golia has lost half of its resources wit11 Oyu Tolgoi agreement and claimed that the deal with Rio Tinto has become a neo-colonialism example. Another reason for annul­ment was Mongolia's inability to profit from the project, ooich broke international regulations by over­looking the Constitution. Further­more, due to inefficient water man­agement of Oyu Tolgoi, Gobi region is ctmently under risk of desertifica­tion. Lastly, the agreement does not inch. Ide an establishment of copper smelter, stated the chairmen of political parties at the press conference. Gankhuyag Tserendorj, Chair­man of Civil Will-Green Party, re­marked "Oyu Tolgoi LLC reset its resource amount in October 2014.

As announced, fue deposit has a total of 44.5 million tons of cop­per, 1914 tons of gold, 11939 tons of silver and 205 thousand tons of molybdenum. As of last friday, the copper price was USD 6500 per ton, gold price - USD 1700 per ounce, silver - USD 16 per ounce and moybdenum - USD 25 thousand per ton at the London Metal Exchange. As such, the deposit is wort11 around USD 400 billion This is wort11 MNT 320 million per capita and MNT 1.3 billion per household. However, Mongolia purchased its 34 percent with a loan from foreign company. Due to inefficient asset management, benefits for Mongolia is fairly low as the country will not profit from sales revenue. Also, mined gold is not sold to tl1e Bank of Mongolia." "The shareholders' agreement limits the dividends to shareholders. This makes it impossible for Mongo­lia to profit from Oyu Tolgoi deposit.

The majority of Oyu Tolgoi's prof­itability has been mined in the first few years. In other words, we are required to mine low concentrates with high expense. This is another reason for the non-profitability," not­ed Mr Gankhuyag and announced "We do not want to chase investors away. We want fairness." According to the Mongolian Stock Exchange (MSE), out of 218 shareholding companies listed at the MSE, 56 percent or 121 companies have submitted their annual consolidated financial statements and notifications of their regular shareholders' meeting. Under the Company Law of Mongolia, Board of Directors of the MSE listed companies have to issue t11eir decision of shareholders' meeting as of March 22 and submit their notification of t11e meeting to authorized organizations by March 27. Since the decision, the meeting shall take place within 40 days or before May I. However, it was noted by a spokesperson of the MSE that for some companies, more specifically, larger groups, their consolidated financial statements may have been delayed because of auditing. "We will continue to receive their statements. When received, we will make them available for the public by placing on our web site," the spokesperson added. For delayed ornon-submissions Financial Regulato1y Committee will take measures under applicable laws.