Oyu Tolgoi has been instructed not to support additional funding of 2.3 billion
Oyu Tolgoi has been instructed not to seek additional funding of $ 2.3 billion and to file a lawsuit in a London court.
The Temporary Committee responsible for monitoring the implementation of the Parliament Resolution No. 92 of 2019 on “Ensuring Mongolia’s interests in the development of the Oyu Tolgoi deposit” met today / April 20, 20 / /.
Ts. Davaasuren, Chairman of the Temporary Committee and Member of the State Great Hural (Parliament) of Mongolia It is planned to discuss two issues: to provide guidance and to hear information on the Oyu Tolgoi agreement, the environment and taxes.
Four members of the State Great Hural, J.Bat-Erdene, Sh.Adshaa, Kh.Bolorchuluun and S.Ganbaatar, asked questions and Ts.Davaasuren, Chairman of the Temporary Committee, answered questions. For example, members of the Interim Committee were instructed to file a counterclaim immediately after the deadline for filing a counterclaim against the Government of Mongolia expires on April 30 in the International Court of Arbitration in London. The note suggested that it should be submitted to the government. S.Ganbaatar, a member of the State Great Hural, said that the Government of Mongolia is likely to win the dispute.
Ts. Davaasuren , Chairman of the Interim Committee , agreed to receive additional funding of $ 2.3 billion from Turquoise Hill Resources and Rio Tinto International Holdings to complete the development of the Oyu Tolgoi underground mine. We are working on the plan to be approved by
This increases Oyu Tolgoi’s debt, making it impossible for the Mongolian side to receive dividends during the life of the project, further exacerbating the debt situation, and Oyu Tolgoi is reluctant to support the additional $ 2.3 billion it plans to receive. The Board of Directors of the LLC was introduced to the Mongolian side.
, Member of the State Great Hural (Parliament) said, In this regard, we propose to take immediate measures to protect the interests of the Mongolian side and include it in the draft direction. “
In response to members’ questions, Ts. Davaasuren said, “Oyu Tolgoi LLC’s 2013, 2014 and 2015 financial statements show that it has 1 trillion and 80 billion MNT in free cash balance, which shows that it is possible to finance the development of the underground mine with its own operating income.”
Then, a vote was held on the wording of the dissenting vote. Oyu Tolgoi’s lawsuit filed by Sh. Adshaa, a member of the State Great Hural (Parliament) of Mongolia, was supported by 61.1 percent of the members of the International Arbitration Court in London.
According to the minutes of the meeting of the Temporary Committee
The government has warned Erdenes not to support the additional $ 2.3 billion it plans to receive, as any additional funding will increase Oyu Tolgoi’s debt, making it impossible for the Mongolian side to receive dividends over the life of the project and further indebtedness. To the Mongolian side of the Board of Directors of Oyu Tolgoi LLC and Oyu Tolgoi LLC,
The Government, as a shareholder, shall take immediate measures to protect the interests of the Mongolian side in this regard;
Oyu Tolgoi has also been instructed by the International Court of Arbitration in London to take immediate action to file a counterclaim against the Government of Mongolia.
According to the ad hoc committee, 72.2 percent of the members voted in favor of the draft mandate to be given to the Government in its entirety.
Afterwards, information from relevant organizations on the Oyu Tolgoi agreement, environment and tax issues was heard.
The General Department of Taxation introduced the tax on Oyu Tolgoi LLC. E.Bayasgalan, a member of the Board of Directors of Oyu Tolgoi LLC, provided information related to the financing of Oyu Tolgoi LLC, interest rates, underground mine development costs and service life. In connection with the above presentations and information, members asked questions, clarified, received answers, made specific proposals, and decided to discuss and resolve the proposals at the next meeting.
Ts. Davaasuren, Chairman of the Temporary Committee and Member of the State Great Hural, concluded the meeting by instructing each organization to provide information related to the implementation of the Investment Agreement and submit consolidated information to the Temporary Committee.