TT CEO unfazed by delays An interview with Erdenes Tavan Tolgoi CEO, B. Enebish

A Government Assembly meeting was held regarding TT’s nominal value stocks that are in its 39th Protocol.


What happened regarding this?

It has been postponed until next week.

In your opinion, what decision will be made? Is it really necessary to make changes to the 39th Protocol?

Erdenes Tavan Tolgoi is a state owned company. Responsibilities for vital decisions that concern stocks go to the Government. We will work within the guidelines issued by the Government. The decision will be made soon.

We will release stock in late May. But a lot of things will depend on the international stock exchange markets and on how fast the process of giving out stock to people and private companies go.

As for our productions, we aim to produce 3 – 4 million tons of coal this year.

People criticize that IPOs released by private companies grow extremely fast, whereas state owned companies’ IPOs progress is slow. Do you agree with this?

I don’t think so. The Government will consider many objective and goal related factors when operating the company. This is not the reason our mining operations are at a slow pace. State Great Khural protocol was out in the summer of 2010, or one and a half years ago. Then we began our operations. We produced 1 million tons of coal last year. Most problems in our mining and transportation processes have been solved during this time. Now we are much less worried than before. State owned mining companies are actually growing fast.

How will the issuing of 1 million MNT to Mongolian citizens effect stock exchanges?

State Property Committee is discussing this with the Government. I don’t have anything to say on the subject.

Why are foreign company tenders are progressing very slowly?

Mongolia has been discussing this with Russia, Korea, China, and the United States for 9 to 10 months. I cannot give a definite answer. Discussions and decisions are being done at the Government level. As for the company, TT is organizing those meetings and discussions.

What is the nominal price of stocks that are to be issued to the people?

It is not possible to determine it at this time. Generally, nominal prices of stock by companies are relatively low. It is slowly increased by the people who are willing to purchase the stock, possibly by ten or hundred times the initial price. The nominal price does not have to be high or align with market price.

What is being done to increase the price of our coal?
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Shortly after Tavan Tolgoi was in operation, it needed to begin selling or exporting its produced coal. A Chinese state owned company made a deal with a steel producing company to sell 1 million tons of coal from the fourth layer of the mine, for USD 70 per ton.

In the next two years when we start washing and refining our coal, we will again make an agreement on our coal price. We had received an advance payment for 1 million tons of coal, which we donated to the Human Development Fund.

Have the Hong Kong Stock Exchange problems been solved?

The Mongolian Government has decided to sell TT stocks at stock exchanges in Ulaanbaatar, London and Hong Kong. The HKSE is required to agree with Mongolian stock exchange jurisdiction and laws. Working groups from both of the parties have been assigned to work on this issue, but it has not yet been resolved.

To finalize this issue, the Mongolian Law on Bonds and Stocks must be passed first. This law is currently is in its development stage.

Will it be passed before the elections?

Yes, it will be passed before the 2012 elections. It is now being discussed at the State Great Khural. It is a national concern.

Is it taking long because of conflicts between the two political parties?

I don’t think it is taking that long. TT is doing its job.

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