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Erdenes OT’s Executive Director says hundreds of Mongolians will be hired starting in July

By Ch.KHALIUN

In an interview with News.mn, Executive Director of Erdenes Oyu Tolgoi D.Ganbold spoke about Oyu Tolgoi’s underground mine project and emphasized that starting in July the company will hire hundreds of Mongolians for the mine’s expansion.

He said that the underground mine’s development launched in December 2015, after the signing of a financial agreement for the mine’s expansion. “Some work even started before signing the agreement. The Mongolian side pressured for intensifying the underground mine’s development by March. However, negotiations with 14 international banks have started recently. Everything is ongoing in accordance with our plans.”

Ganbold said that the process of spending financing from the International Finance Corporation has started. “Other banks will distribute financing according to their timetables. Some of the financing will be deposited next year. We will spend the money over a couple of years. It doesn’t mean that all of the money will be distributed at once. We need to understand everything properly,” underlined Ganbold. He said that the underground mine’s operations have commenced and the company is in the process of ordering necessary equipment.

“Journalists always ask only about when the financing will be deposited, so do politicians. When any of the big projects move forward, they always pay attention to when the financing will be distributed to the state budget,” Ganbold claimed. He underlined that OT’s underground mine development will be carried out for at least two to three years. He emphasized that when Oyu Tolgoi starts hiring Mongolian workers in July, that the Mongolian economy will start seeing benefits from the project.

The government claims that the interest rate for the low interest housing loan program will be lowered to five percent once one billion USD in financing for OT has been issued. D.Ganbold stressed that only politicians and journalists create such expectations among the public. “Politicians make statements to attract attention from many people, and then journalists spread the news. Politicians and journalists greatly influence society, but they can’t be talking about financing distribution without understanding economic principles,” noted Ganbold.

“Even though there are reports that Mongolia’s economy has grown by one billion USD every year following the launch of the OT mine, it doesn’t mean that the money went into Finance Minister B.Bolor’s pocket. I don’t know how to explain it more clearly,” he said.

“We could say that Mongolia doesn’t produce anything. When we purchase necessary equipment for the mine operations being carried out at depths of greater than 1,000 meters for 500 million USD, it means that not even one USD remains in Mongolia. The money will come to Mongolia in taxes once the equipment crosses the Mongolian border.”

Ganbold said that first stage of investment for the underground mine will be spent on equipment. “This is a business that requires many pieces of equipment. We will start purchasing products from domestic companies. Many domestic companies will be responsible for sand, gravel, concrete, and cement supply, and for food and clothes for workers. It can be understood that a tremendous amount of money will come to Mongolia. We all know that OT’s first project was greatly beneficial for us. At that time, the nation’s economy grew by 17 percent, and within less than ten years, almost everyone bought cars and many new buildings were constructed. Not only thanks to Oyu Tolgoi, but Tavan Tolgoi and other mines created under the Long-named Law contributed to the economic growth. Unfortunately, we were lifted by our small success and everyone became an environmental ranger. As a result, we did stop the operations of many mines over the last few years. But we don’t have anyone to complain to. We were all involved in this issue somehow, no foreigner came to Mongolia and instructed us. Around 60 to 70 percent of today’s crisis was created by us, Mongolians,” stressed D.Ganbold.

Short URL: http://ubpost.mongolnews.mn/?p=19278

Posted by on Apr 15 2016. 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.

1 Comment for “Erdenes OT’s Executive Director says hundreds of Mongolians will be hired starting in July”

  1. It is good but unusual that a Mongolian is so forthright. I am D. Ganbold will be criticised by Mongolians for telling the truth that criticises Mongolians.

    He is right though, and things that have been done by Mongolia in the past few years, as they say in the west is like shooting you self in the foot or cutting off your own nose to save your face.

    It started in 2005 when the Prime Minister at that time stated, “Mongolia recognizes it is in competition with other jurisdictions for exploration investment and that they would do everything to encourage investment in Mongolia”. In less than ONE year, in 2006, the government introduced the disastrous 60% windfall profits tax! This started the flying away of investors and money from Mongolia.

    Politicians for their own political ends, or to deflect blame for their mismanagement or their own corruption started blaming western foreigners for all of Mongolia’s problems. Never saying anything wrong with Chinese or Russian companies.

    NOTE 7% of the wealth of Mongolia is owned by Mongolian federal politicians. This does not include what is owned by their friends and families. This may not seem a lot , but is horrendously high when compared to less than 1% ownership of National wealth by politicians in Western countries.

    Around 2010 an Australian accounting company did an audit of MRAM and found $72 million missing, but that story ‘died’ after ONLY one week where in the west that would be a major investigation and news story for months. Western public companies are bound by strict rules, unlike Mongolian, Chinese and Russian companies who readily partake in bribery. A study in 2012 showed that most mineral licenses were held or controlled by Chinese companies. I have seen Mongolian companies paying bribes to bureaucrats and politicians.

    Every time a western company official has ‘blown the whistle’ on corruption in Mongolia they have been detained, had passports confiscated, interrogated for months or charged with corruption themselves. LESSON …do not interfere with government corruption! The Mongolian press which is tightly controlled says very little about Mongolian corruption until recently, but makes huge ‘accusations’ about western companies perceived transgressions. Then there was the long drawn out arguments with Borro Gold AND Oyu Tolgoi AND Tavan Tolgoi AND confiscation of western companies licences (like Khan Resources), which further discouraged foreign investment in Mongolia.

    If all these things had not been done and there was no upper level corruption Mongolia would be a prosperous country and a model for others.

    As D. Ganbolt truthfully says (though many Mongolians will refuse to believe it) ” Around 60 to 70 percent of today’s crisis was created by us, Mongolians”

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