Erdenes Tavan Tolgoi announces complete repayment of debt to CHALCO

Ulaanbaatar /MONTSAME/ The USD 350 million debt of Erdenes Tavan Tolgoi JSC owing to Aluminum Corporation of China Limited (CHALCO) was repaid completely. This enables the Mongolian government to reap the benefits of coal exploitation at the East and West Tsankhi deposits of Tavan Tolgoi mine as the coal mining revenues will be added to the government budget 100 percent, said D.Ariunbold, CEO of Erdenes Tavan Tolgoi JSC, on Thursday, March 30. “The Mongolian government had paid USD 240 million to CHALCO as of last October, and remained liable for USD 110 million more. Remnant of the debt was repaid within seven months. Thanks to wise management and government directions toward commencing exploitation in the West Tsankhi and open auction on coal, this became possible. Price for a ton of coal stood at USD 26.0 by September 2016. At the open auction, Tavan Tolgoi’s coal was sold at USD 72.5 per ton. A Mongolian project, jointly proposed by Mongol Uurkhaichin Negdel (Mongolian Miners Cooperative), also known as Khishig Arvin Company, and Olborlolt Mera LLC won the bid for operating the mine. This indicates that national companies have technological and educational capabilities of independently operating such a large-scale coal mine. With Mongolians operating the mine, around 200 billion Tugrugs of investment is staying in the Mongolian economy”, he said. Erdenes TT expects to mine 11.5 million tons of coal and make revenue of USD 550 million. The company extracted 2.8 million tons and exported 2.2 million tons of coal so far in 2017. The Prime Minister has given an obligation to repay debts and distribute payables to the citizens for respective 1,072 shares of Erdenes TT. In case the coal price will be stable for a longer period, the distribution is deemed possible to be launched within this year. Also, Erdenes TT leaders intend to adopt adequate quality management to raise investment from international sources.