14.10.2010 Privatizing Mongolia's state owned assets and what this means for investors, D....
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![Page 1: 14.10.2010 Privatizing Mongolia's state owned assets and what this means for investors, D. Bailiikhuu](https://reader031.fdocuments.in/reader031/viewer/2022030304/587a5a411a28ab520b8b660d/html5/thumbnails/1.jpg)
D. BailikhuuSPC of Mongolia
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� Total State Property- 4,1 trillion ₮
� SOE’s–72
� Government institution – 934
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� State share of SOE’s to sell through the Stock exchange
� To issue additional share and IPO
� To conclude a Concession Agreement
� Mainly, To attract private investment by PPP
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� Conditions:◦ The evaluation of coal resources by the JORC standard◦ Mining License should be assessed in terms of property◦ Power plant and Coal liquids projects are needed to be
studied by the professionals, then it can be implemented
• Methods:◦ To issue additional shares up to 51 percent of shares
owned by the state
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� Conditions:◦ New investment for technological innovation ◦ To increase the heating capacity ◦ To reduce the cost
� Methods:� Concession agreement�
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� Conditions:◦ To extend service framework ◦ Equipment and Technological Innovation◦ To reduce cost ,
� Methods:◦Open bid tender
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�Mongolian airline /MIAT/-Management contract
� “Mongolian stock exchange”/MSE/– Management contract
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� State offers own share to the Korean telecom on contractual basis
� Should refuse, State goes whit use the privatization through open bid
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� 15 strategic deposits
� To bundle shares owned by State by type of minerals
� To establish new Joint Stock company
� To trade certain percentage of state shares at domestic and international stock markets
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.Tavan Tolgoi 6.4 bn t coal
Nariin Sukhait 125.5 mn t coal
Baganuur 600.0 mn t coal
Shivee Ovoo 646.2 mn t coal
Mardai 0.001 t at 0.119% O3U8
Dornod 0.029 mn t at 0.175% O3U8
Gurvan Bulag 0.016 mn t at 0.152% O3U8
Tomortei 229.3 mn t at 51.15% Fe
Oyu Tolgoi 2.7 bn t of ore; 25.4 mn t of copper; 1,028 t of gold
TsagaanSuvarga
10.6 mn t of oxides at 0.42% Cu/ 0.011% Mo; 240.1 mn t sulphidesat 0.53% Cu/0.018% Mo
Erdenet 1.2 bn t at 0.51% Cu/0.012% Mo
Burenkhaan 192.2 mn t at 21.1% P2O5
Boroo 0.025 mn t at 1.6g/t Au
TomorteinOvoo
7.7 mn t at 11.5% Zn
Asgat
Metallurgical coal
Metallurgical coal
Lignite coal
Lignite coal
Uranium
Uranium
Uranium
Iron
Copper, gold
Copper, molybdenum
Copper,molybdenum
Phosphor
Gold, ore
Zinc
Silver 6.4 mn t at 351.08g/t Ag
Reserves and qualityDeposit MineralsStage of development, start date, output p.a. Ownership structure
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
100% Erdenes
100% private (SouthgobiSands, MAK-Qinhua JV)
75% SPC, 25% locally listed
90% SPC, 10% locally listed (ope-rational part; rest by Erdenes)
100% private company
21% SPC, 21% Russian Gov., 58% Khan Resources
100% private Chinese comp.
100% Darkhan Metallurgical factory (100% owned by SPC)
34% Erdenes, 66% Ivanhoe Mines
51% SPC, 49% Russian Gov.
100% MAK (private company)
100% mult. private companies
100% Tsairtminerals (private JV)
100% Mongolrostsvetmet (50% SPC, 50% Russian Gov.)
100% Boroo Gold
Partial production, ramp-up in 2011, 15-30 mn t
Feasibility study
Production, 2.8 mn t
Production, 2.0 mn t
Feasibility study
Feasibility study
Feasibility study
Feasibility study
Development, 2013
Feasibility study
Production, 27.1 mn t of ore
Feasibility study
Close to depletion
Production, 0.07 mn t of zinc
Feasibility study
Estimated capex
USD 2.2 bn (1.6 bn for first 3 years)
N/A
–
USD 4 bn for power plant
USD 200 mn for all three
USD 100 mn
USD 12 bn (5 for first 5 years)
USD 200 mn
(USD 150 mn for downstream plant)
N/A
–
–
USD 47 mn
SOURCE: Worley Parsons; Ministry of Mineral Resource and Energy; State Property Committee
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Tavan tolgoi Coal Mine
SPC
Erdenes MGL
Erdenes TT
citizens
Mongolian Mongolian Mongolian Mongolian private private private private companiescompaniescompaniescompanies
Investor Operator company
Marketing company
Mining contractPSH contract
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Coal assets company
SPC
Baga nuur600 mn t
Shvee ovoo530 mn t
Nariin Suhait
130 mn tttt
Power plant
300MW
Coal mine 20mn t
Coal liquifation factory
Power plant
4800MW
Coal mine
20mil t
Electricity transmision
line 600KB
Other coal
deposits
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Erdenet OT45m tn
Tsagaan suvragaAsgat
Copper and Silver
company
SPC
Copper smelting factory
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SPC
Temurtei240 m tn
Temur tolgoi25m tn
Darhan metallurgical plant
zinc
Iron Assetscompany
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CAU45t tn Mardai
SPC
MonAtom
3 Bulag10t tn
Coge gobi10t tn
3 saihan10t tn
Cameco
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Rail way1000 km
Auto road270 km
Power Plant600Mw
Water Pipe Line 70km
220kvLine 500 km
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� Corporate Governance for SOE◦ Member BoD◦ Subcommittee of BoD
� Balanced Score Card � Audit◦ E&Y◦ KPMG◦ PWH
� Disclose� IAS� IPO� Independent regulator for infrastructure � Price deregulation for infrastructure
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