TAVAN TOLGOI BID WINNER AND WORKING GROUP MEET

Ulaanbaatar /MONTSAME/ The government's working group in charge of the selection of Tavan Tolgoi strategic investor and of the further negotiations received December 25 the representatives of the bid winner—joint consortium of Shenhua Energy, Sumitomo Corporation and Energy Resource LLC. The sides--a head the group the Minister of Mongolia M.Enkhsaikhan, Minister of Mining R.Jigjid, Minister of Finance J.Erdenebat and Minister of Road and Transport N.Tomorkhuu, an executive director of Energy Resource LLC G.Battsengel, a vice director L.Oyunbat, a member of Board of China Shenhua Overseas Development&Investment Mr Shao Junjie, a vice president Zhou Tiejun, and a country manager of Sumitomo Corporation to Mongolia Hiroto Fijivara--agreed that their negotiations will start from January 5 of 2015, and promised to each other to put all efforts to reach successful agreement on forwarding the investment and operations at Tavan Tolgoi coal deposit. Mr Enkhsaikhan said this is the project of global standards, as the estimated cost stands at four billion US dollars. A composition of bid winning organization including representatives of Mongolia, China and Japan increases the project’s value, he added. Mr Battsengel, an executive director of Energy Resource, said their company is willing to contribute in the development of their country with the experiences they achieved so far. Mr Fijivara mentioned that the Sumitomo has been operating in Mongolia since 1992 and said a role of Sumitomo in this project is to focus on commercializing of the coal into third markets. “Shenhua realizes that the cooperation with an experienced domestic company in implementation of overseas projects always brings success, having implemented many projects in different countries. The corporation will collaborate with Mongolian and Japanese companies, pursuing the market principles under the laws and regulations of Mongolia,” said the Chinese representative Mr Shao. The working group presented the prior requirements in the implementation of Tavan Tolgoi project as follows: ownership of the deposit will always be kept by the Government of Mongolia; national companies will make up a majority in the course of the implementation; the products of the project should be commercialized at the international market; the investors should promote the local development with respect towards Mongolian culture and conduct the works by eco-friendly means. The sides also agreed to observe the “Strategy of mutual benefits” in the negotiations, which also include a relationship based on trust and discussions of concerned matters, and working for reaching joint creative solutions for problems.