R.Jigjid: OT will contribute 350 million USD to the state budget this year


Standing Mining Minister R.Jigjid was interviewed about timely issues in the mining sector of Mongolia, such as Oyu Tolgoi and Tavan Tolgoi mines.

A Mongolian delegation headed by Prime Minister Ch.Saikhanbileg visited Dubai in May to resolve the matter of Oyu Tolgoi’s underground mining development plan. After the signing of the deal resulting from that meeting, it was said that a substantial amount of investment can now flow into the country. Has investment improved in the mining sector since then?

Of course, investment will not automatically flow in. The Oyu Tolgoi project will attract a substantial amount of investment to the Mongolian economy. If the project is executed successfully, we will have plenty of investment. By singing the plan, the world’s outlook on Mongolia has become positive. But it is too early to say that investment has grown since. To start and operate the underground mine will require a great amount of capital. To raise this capital, the preparation work to acquire loans from foreign markets, particularly banks, is currently taking place. Within the project plan, the project is set to contribute 350 million USD this year to the state budget and 1.2 billion USD next year. Once the project is in motion, investment will improve.

It was reported that the investors’ side has submitted the pre-feasibility study to the government of Mongolia. Is that true?

The investors’ side submitted the pre-feasibility study yesterday (on Tuesday). Our specialists have begun their work on this.

How much money is left to be repaid to Chinese steel giant CHALCO from the Tavan Tolgoi coal mine?

I was told that we are to receive around 30 million USD from CHALCO, and we owe them 140 million USD. So the outstanding debt is at around 110 million USD.

How are coal exports compared to projections? There were reports that tax revenue from coal exporters did not reach their target.

In the first seven months of 2015, coal extraction exceeded targets with a completion rate of 105.6 percent; 12.5 million tons of coal was planned and 13 million tons were extracted as of July. Coal mining was expected to contribute 77.4 billion MNT in the first seven months of 2015, and so far they have accumulated 72.6 billion MNT. So they are at 93.8 percent. We expect to extract 21.1 million tons of coal this year, and completion is currently at 61.6 percent. Coal mining’s contribution to the state budget this year was projected to reach 132 billion MNT, which is currently at 54 percent.

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Posted by on Aug 27 2015. Filed under Business & Economics. You can follow any responses to this entry through the RSS 2.0. You can skip to the end and leave a response. Pinging is currently not allowed.

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