10.29-31.2013, PRESENTATION, Speech, Mr. Ariunbold Byamba
1. Speech by Mr. Ariunbold Byamba, Deputy Director, Erdenes MGL LLC,
Mongolia, to Mongolian Mining Summit 2013
Crown Perth, Australia, October 29-30, 2013
Esteemed guests and delegates,
Ladies and gentlemen,
At the outset, I would like to extend my warm greetings and express my sincere thanks to you all
for joining this Mongolian mining forum.
There are countries that have been able to be developed nations and strong economies based on
their mining and energy industries. I think Australia is prominent among these countries.
Mongolia is a country with an abundance of minerals despite its small population. We have no
doubt that the mining industry based on these minerals will play an important role in the
country’s economic development and export revenue growth.
In other words, it is evident that mining industry revenues will make a significant contribution to
Mongolia’s industrial and other sectors.
Given the fact that production from the mining industry has accounted for 67% of Mongolia’s
aggregate industrial output and 89.2% of all exports over the past 5 years respectively, Mongolia
is already heading to a strong economy that can develop rapidly.
Today, licenses are issued and exploration – conducted in 16% of the Mongolian land only some
of which are being developed by the government and national corporate entities.
The Government of Mongolia established Erdenes MGL LLC (Erdenes MGL) – a wholly
government-owned company in 2007 to develop and produce mineral wealth and deposits for
economic value which will make a meaning contribution to the economy and it was mandated to
own government-owned interests in major mineral deposits such as Oyu Tolgoi and Tavan
Tolgoi.
Moreover, 51% Mongolia’s shareholding of Erdenet Plant LLC, licensee of the strategic mineral
deposit, 75% government shareholding of Baganuur JSC, and 90% government shareholding of
Shivee Ovoo JSC, are transferred to Erdenes MGL pursuant to the Government’s resolution #
100 issued on March 16, 2013, respectively.
Erdenes MGL has an obligation to develop and produce 15 strategic mineral deposits such as the
Oyu Tolgoi, Tavan Tolgoi, Tumurtei, Shivee Ovoo, and Asgat along with related infrastructure
for economic value under the Mongolia Law on Human Development Fund in compliance with
market principles and provide effective management for the projects.
Now, I would like to expose some of the deposits.
2. 1. Oyu Tolgoi copper-gold deposit
The deposit is located in Khan-Bogd sub-province (soum), South Gobi province and has
geological ore reserves of 6.5 billion tons that contain 45 million tons of copper at a 0.3% copper
equivalent cut-off grade, 1.8 thousand tons of gold, 157 thousand tons of molybdenum, and 12
thousand tons of silver respectively.
As part of the Oyu Tolgoi (OT) project a concentrator that has the capacity to process 100,000
tons of ore per day was put into operation in December 2012 and started to export copper
concentrate. At the end of 2012, 13,000 people worked on the OT project.
An OT underground mine is planned to be put into operation at the OT in 2016 and once it is in
operation it will be one of the 5 world-class copper mines and produce 24% copper supply in
Asia.
Erdenes MGL owns 34% of the shareholding of Oyu Tolgoi LLC that is developing the deposit
through its subsidiary – Erdenes Oyu Tolgoi LLC.
2. Tavan Tolgoi coking coal deposit
The deposit is located in Tsogt Tsetsii sub-province, South Gobi province that covers 70,000
hectares of land. It has coal reserves of 7.42 billion tons 1.4 billion tons out of which account for
coking coal and 4.6 billion tons – for thermal coal.
Erdenes MGL established its subsidiary – Erdenes TT to develop a strategic coal deposit – Tavan
Tolgoi JSC that started up in August 2010.
Erdenes TT will produce 7 million tons of coal out of 2 corridors at the mine in 2013. It will
produce about 30 million tons of coal in 2016 when it is at full capacity.
Apart from producing coking coal, Erdenes TT is carrying out related surveys on diesel and gas
production out of thermal coal from the deposit.
3. Erdenet copper-molybdenum deposit
The deposit is located in Khangal sub-province, Bulgan province and has reserves of 5.2 million
tons of copper and 114 million tons of molybdenum. Since 1978 the Erdenet concentrator has
conducting mining operations and as of the beginning of 2013 the balance metal reserves account
for 507.8 thousand tons at the deposit.
Erdenes city with about 100 thousand inhabitants based on the deposit and it is connected with
Ulaanbaatar and Darkhan by road and railroad.
4. Baganuur coal deposit
3. The deposit is located in Baganuur district, Ulaanbaatar has coal reserves of 600 million tons. It
has been developed since 1978 to supply thermal coal for power plants in Ulaanbaatar.
5. Shivee Ovoo brown coal deposit
The deposit is located in Shivee Gobi sub-province, Gobi Sumber province. Preliminary
prospecting and exploration findings indicate that the inferred coal reserves can reach 2.8 billion
tons.
Coal is currently being developed in the Shine Us area that has coal reserves of 646.5 million
tongs 565 million tons out of which account for balance reserves.
At the end, I would like to express my confidence that you as investors will work together with
us in developing and producing the above deposits for economic value on a mutually beneficial
basis.
Thank you for your attention.