GERMANY TO ISSUE 745 MILLION USD LOAN GUARANTEE FOR TSAGAAN SUVARGA PROJECT
(7 Dec 2015) News.mn reported that the Government of Germany will make 745 million USD in investments in the Tsagaan Suvarga copper-molybdenum deposit mega project in the form of loan guarantees. During the Minister of Industry’s visit to Germany in November, Mongolia and Germany signed an intergovernmental agreement on cooperating in the minerals, industrial, and technology sectors. Under the agreement, the relevant ministries of Mongolia and Germany have pledged to work toward recovering debt and receivables related to joint projects being implemented. The project to build a copper and molybdenum concentrator at the Tsagaan Suvarga deposit, located in Dornogovi Province’s Mandakh soum, was launched in 2001. The project was being implemented by Mongolyn Alt (MAK), a company owned by MP N.Nomtoibayar, but it is now a subsidiary of Erdenes Tsagaan Suvarga.
The Government of Mongolia, MAK, and Erdenes Tsagaan Suvarga established an investment agreement for the Tsagaan Suvarga project on October 13, 2015. Minister of Mining R.Jigjid highlighted that the agreement was the first to be signed after the Law on Investment was amended at the end of 2013.
Estimates suggest that at its full capacity, the concentrator could process 14.6 million tons of ore and produce 310,000 tons of copper and 4,000 tons of molybdenum concentrate per year. Current approved reserves of the deposit will be utilized in the form of an open pit mine for 18 years in three stages.
Estimated expenditure for the project stands at just over 1 billion USD, 344.4 million USD of which has already been invested in the project. The Ministry of Mining and MAK report that the sides have planned to pursue additional financing from Germany, and other international banks and financial organizations.
Project implementers underlined that the project will generate 3.3 trillion MNT (approximately 185 billion MNT annually) in taxes and other payments during its implementation period, providing over one thousand Mongolians with jobs. Investors say they will also fund the construction of an administration office, hospital, school, dormitory, kindergarten, and culture center in Mandakh soum. The joint agreement states that sub-contractors and suppliers for the mega project’s development will be chosen with a priority placed on domestic entities.
Source: UB Post