EBRD funds first coal washing plant in Mongolia
$180 million loan to Energy Resources
In its largest investment in Mongolia to date, the EBRD is raising the standards in the country’s mining industry with a $180 million loan for the construction of the first coal washing plant in Mongolia.
The financing is extended to Energy Resources, a private Mongolian mining company, which owns and operates the Ukhaa Khudag (UHG) coal mine in South Gobi, producing high quality coking coal. The EBRD holds a minority stake in the company.
The proceeds of the loan will finance the construction of a Coal Handling and Preparation Plant (CHPP) at the UHG mine. The plant will be built in line with the latest international best practices, bringing the highest environmental standards to Mongolia’s mining sector.
The new plant will enable Energy Resources to increase exports, boost its competitiveness in both international and domestic markets, and help the company to establish its brand name for Mongolian coking coal in the Chinese and south-east Asian markets.
In addition, as part of the project, the company will support small and medium companies in the mining cluster in cooperation with the EBRD’s TAM/BAS programme*, thus creating new business opportunities in Mongolia and contributing to the sustainable development of the mining sector.
The EBRD loan is complemented by grant financing of €1.2 million, which will be used to initiate the digitalization of the mining licences archive of the Mineral Resources Authority of Mongolia, which will improve the transparency and accessibility of the records. This will lead to lower costs for acquiring geological information, enabling mining companies to increase investments in exploration.
“This project will embed the highest international standards in the mining industry in Mongolia, serving as a great example to follow by other players in the sector. The EBRD’s investment will have wider positive implications in Mongolia by creating new business opportunities for local companies servicing the mining industry”, said Riccardo Puliti, EBRD Managing Director for the Energy Business Group.
“I am pleased to have such a prestigious financial institution to take an interest in our mining operations and support our company. It is an important validation of the quality of the mine and the operational, safety and environmental standards which we adhere to. We pride ourselves in developing UHG into a world class operation which can continue to attract quality investors into Mongolia”, said Energy Resources’ Chairman, Jambaljamts Odjargal.
Since the beginning of the EBRD’s operations in Mongolia in 2006, the Bank has committed over €125 million across 28 projects in various sectors of the Mongolian economy, with total projects cost of €337 million.
*The EBRD’s TurnAround Management (TAM) and Business Advisory Services (BAS) Programme helps private enterprises to adapt to the demands of a market economy. These complementary programmes develop the micro, small and medium-sized enterprises through a multi-tiered approach. TAM/BAS is fully integrated into the EBRD’s activities, alongside banking and investment.
Last updated 6 July 2010
Ina Coretchi
London - Tel: +44 20 7338 7874
In its largest investment in Mongolia to date, the EBRD is raising the standards in the country’s mining industry with a $180 million loan for the construction of the first coal washing plant in Mongolia.
The financing is extended to Energy Resources, a private Mongolian mining company, which owns and operates the Ukhaa Khudag (UHG) coal mine in South Gobi, producing high quality coking coal. The EBRD holds a minority stake in the company.
The proceeds of the loan will finance the construction of a Coal Handling and Preparation Plant (CHPP) at the UHG mine. The plant will be built in line with the latest international best practices, bringing the highest environmental standards to Mongolia’s mining sector.
The new plant will enable Energy Resources to increase exports, boost its competitiveness in both international and domestic markets, and help the company to establish its brand name for Mongolian coking coal in the Chinese and south-east Asian markets.
In addition, as part of the project, the company will support small and medium companies in the mining cluster in cooperation with the EBRD’s TAM/BAS programme*, thus creating new business opportunities in Mongolia and contributing to the sustainable development of the mining sector.
The EBRD loan is complemented by grant financing of €1.2 million, which will be used to initiate the digitalization of the mining licences archive of the Mineral Resources Authority of Mongolia, which will improve the transparency and accessibility of the records. This will lead to lower costs for acquiring geological information, enabling mining companies to increase investments in exploration.
“This project will embed the highest international standards in the mining industry in Mongolia, serving as a great example to follow by other players in the sector. The EBRD’s investment will have wider positive implications in Mongolia by creating new business opportunities for local companies servicing the mining industry”, said Riccardo Puliti, EBRD Managing Director for the Energy Business Group.
“I am pleased to have such a prestigious financial institution to take an interest in our mining operations and support our company. It is an important validation of the quality of the mine and the operational, safety and environmental standards which we adhere to. We pride ourselves in developing UHG into a world class operation which can continue to attract quality investors into Mongolia”, said Energy Resources’ Chairman, Jambaljamts Odjargal.
Since the beginning of the EBRD’s operations in Mongolia in 2006, the Bank has committed over €125 million across 28 projects in various sectors of the Mongolian economy, with total projects cost of €337 million.
*The EBRD’s TurnAround Management (TAM) and Business Advisory Services (BAS) Programme helps private enterprises to adapt to the demands of a market economy. These complementary programmes develop the micro, small and medium-sized enterprises through a multi-tiered approach. TAM/BAS is fully integrated into the EBRD’s activities, alongside banking and investment.
Last updated 6 July 2010
Ina Coretchi
London - Tel: +44 20 7338 7874
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