 Prime Minister S.Batbold yesterday met with the
working group on Tavantolgoi, set up by Parliament to prepare general
procedures for exploiting the mine.
The group consists of representatives from the
Ministries for Mineral and Energy, Finance, Nature, Environment and Tourism,
and Internal Affairs and from the Government Property Bureau.
The Prime Minister stressed the importance to establish tin, coked coal and
chemicals factories so that value added products based on the output from this
strategic deposit could be manufactured. This will need development of
infrastructure and a legal framework. The Minister for Nature, Environment and
Tourism said the group is ready to present plans for infrastructure, railways
and water reserve to the Government. Norwest of Canada
worked as a technical consultant. It is now felt that the Sankhi deposit’s
total worth is USD5 billion than originally estimated.
Parliament has directed that the first exports from Tavantolgoi must be made by
2012. The Minister said soil removing work must start this summer. The working
group considered two options: whether it was better to attract foreign
investors with the state keeping 51 percent ownership, or to keep 100 percent
ownership and hire international operating companies for a fee.
Batbold said the mine should be owned fully by the state and advised the group
to work on the second option. Altogether 11 companies or consortiums from Russia,
China,
India,
Japan,
Brazil
and South
Korea have expressed interest in investing in
Tavantolgoi. The tender will be announced this summer.
The electricity needs are proposed to be met by establishing a power station
with a capacity of 100 mw in the first place, to be later raised to 600 mw. The
next big problem is a railway to transport the coal. There are two options:
Tavantolgoi-Zuunbayan-Sainshand and Tavantolgoi-Oyutolgoi-Gashuunsukhait. The
Ministry for Road, Transportation, Construction and City Development is working
on the issue.
The water issue is also important. The closest water source to the deposit is Balgas
Ulaan Lake,
65 km way. The lake however can provide only about half the mine’s needs. The
Ministry for Nature, Environment and Tourism will have to find other sources.
The Prime Minister instructed the group to finish its work before the Spring
session of Parliament. The Government will finish negotiations with investors
during that session.
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