Prime Minister to end Oyu Tolgoi deadlock
Prime Minister of Mongolia Ch.Saikhanbileg made a statement to the people of Mongolia on April 5, on Parliament’s performance of last three months and introduced planned short-term projects.
The new “Government for Solutions” was established three months ago, with the priority to end the economic crisis. Within the last hundred days, the government has completed over 40 large projects, such as state budget cuts, approved a detailed plan to overcome the economic crisis, signed the first free trade agreement with Japan, approved the second phase of the Mongolian Millennium Challenge, established trilateral labor-society dialogue, took measures to increase gold mining, found new sources to finance oil production, reduced expenses of ministries and government agencies, recovered exploration operations, resolved financing issues of a new hospital, increased pensions and welfare amounts, and promoted Mongolia at the world’s largest tourism trade fair, ITB Berlin, according to the Prime Minister.
Ch.Saikhanbileg called on the nation to create rather than criticize and announced that the government has reached an agreement with Oyu Tolgoi investors on the project’s underground mining operation after two years of dispute. He added that the government will make an official announcement on these results to the international community when they are finalized.
The second phase of Oyu Tolgoi is expected to bring a 4.2 billion USD investment to Mongolia, according to the Prime Minister. Ch.Saikhanbileg said that negotiations with a foreign consortium to develop the Tavan Tolgoi coal deposit will also be finalized soon.
The decision to move forward on Oyu Tolgoi reportedly came after the Prime Minister’s controversial text poll to all mobile phones in Mongolia. The majority of the poll’s respondents supported increased overseas investment in megaprojects such as the Oyu Tolgoi mine to stimulate the troubled economy, according to Ch.Saikhanbileg.
In addition to a status update on big projects, the Premier’s address brought up government decrees and objectives of Parliament’s spring session, which include plans to issue Tavan Tolgoi shares to the public free of charge, tax reforms and liberalization of energy prices.
Ch.Saikhanbileg said that the government will actively cooperate with Parliament and political parties to make political parties healthy, adopt a new law on political parties, make its financing transparent and adopt a new law on elections.
According to Ch.Saikhanbileg said that his poll revealed that provincial residents aren’t supportive of mining operations in their region. Therefore, the government will submit a law that resolves provincial taxation system. With the new law, 30 percent of royalty payments will be allotted to the province.
The Prime Minister promised that Noyon Uul will remain untouched but Gatsuurt coal deposit will be exploited.
A construction of paved-roads in Dornod and five western provinces will continue, as well as the construction of a 267 km railway between Tavan Tolgoi and Gashuun Sukhait. The construction of a 570 km railway between Erdenet and Ovoot will start this year.
The investment for gasification and liquefaction of coal being resolved, and new cement factories are expected to be commissioned this year, according to Ch.Saikhanbileg.
Construction of a gasification plant, which is set to start this year, is expected to intensify the fight against air pollution in Ulaanbaatar. The cabinet has resolved to settle the financing for gas-lines, based on the funding from the easy-term loan being provided by the government of China, according to the Premier.
The government will resolve the restructure of the Mongolian Stock Exchange with the London Stock Exchange, reform of MIAT Mongolian Airlines in cooperation with related domestic and foreign entities, and introduce the organization model of Singapore’s Temasek Holdings to state-owned companies.
Another important concern for the government is the introduction of “Start-Up” program that aims to promote businesses, in particular the export-targeted industries and enterprises, said Prime Minister Ch.Saikhanbileg during his speech.
The Ministry of Industry will carry out a special program that will support industries and entities that export. The ministry plans to accumulate one billion USD from foreign trade by promoting wool and cashmere industries, as well as other new industrial initiatives of Mongolia.
Ch.Saikhanbileg said he intends to visit financial and investment centers of the world along with representatives of the private sector to build crelation, and aim to improve the current economic condition by exploring and inviting investors as much as possible.
The cabinet is focusing on the immediate adoption of the draft laws on casinos, establishment of horse racing tracks with betting stations, building exhibit and conference halls to attract investors and tourists.
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