"Year of the tiger protagonists take center stage in 'MINE GER'"

As the Mongolian New Year approaches, the Year of the Tiger comes to a close and the Year of the Rabbit begins. The mining industry in Mongolia can be seen as one large family, with the key players of the Year of the Tiger now taking a break in the home of this great house or MINE GER. Looking towards the future, Mining Insight has highlighted the upcoming trends and developments in the industry, offering insight to its readers.

In August of last year, the Cabinet reshuffled its members, with eight ministers being replaced by Parliament members. Among them was G. Yondon, the former Minister of Mining and Heavy Industry of Mongolia, who was promoted to the General Director position at Erdenet Mining Corporation SOE. As a professional engineer rather than a politician, many initially saw Yondon as too quiet and lacking in political influence during his tenure as a minister. However, he now has the opportunity to work as an engineer and make a tangible impact at Erdenet Mining Corporation. Yondon’s appointment as General Director is significant, as it is a highly respected and influential position in Mongolia, even more so than that of the Prime Minister. However, with great power comes great responsibility, and not everyone is willing to take on the task of leading Mongolia’s “MINE GER”. As the face of Mongolia’s mining industry, Erdenet Mining Corporation is known for its responsible, sustainable, and accessible practices. Yondon’s appointment as General Director presents a unique opportunity to effect positive change in the modern mining industry through his wide-ranging activities. During his time as Minister, Yondon advocated for significant changes to the industry’s legal environment but was unable to achieve any tangible results before his successor took over. As the seventh person to be appointed General Director of Erdenet Mining Corporation since 1989, he has a chance to make a lasting impact. With enormous capital and operational capacity, Erdenet Mining Corporation is the largest enterprise generating tax and export income. Yondon’s promotion to this position is a reflection of his technical expertise and his potential to drive positive change in the mining industry.

The Year of the Tiger in the Mongolian mining industry was marked by a scandalous incident known as the “Coal Theft” case. The CEO of “Erdenes Tavan Tolgoi” (ETT) SOE B.Gankhuyag, was convicted and is currently serving time in prison. This was not the first time a director of ETT was implicated in a corruption case, and unfortunately, it may not be the last. ETT is one of the largest and most important mining companies in Mongolia, contributing significantly to the country’s economy. In the past three years alone, the company has paid roughly MNT 2 trillion in taxes, making it a major source of government revenue. Its annual expenditures on soil stripping and coal mining amount to MNT 1.5 trillion, and it has also financed two railway projects to transport its products to market. ETT is also known for leading in the amount of money it spends. The previous executive directors of ETT have all faced legal consequences for corruption. B.Enebish, the first executive director, was charged with a criminal case for purchasing an unnecessary bicycle and then fleeing the country. Ya.Batsuur, his successor, was sentenced by the court. The third executive director B.Ariunbold was also arrested by the Anti-Corruption Agency and temporarily detained before being released. B.Gankhuyag became the fourth executive director to face legal consequences for corruption.

The underground mining operations at Oyu Tolgoi will commence in March. After resolving the complex issues between the stakeholders, the project is prepared to commence underground production. Prior to the construction and commissioning of the underground mine, various difficulties and challenges had to be overcome. B.Bold is one of the key figures who is currently involved in resolving those issues. B.Bold has invested approximately USD 6 billion to address issues at Oyu Tolgoi so far. He has annulled the Mongolian government’s debt of USD 2.3 billion and acquired Turquoise Hill Resources for USD 3.4 billion. B.Bold has demonstrated bold decision-making and confident implementation, unlike the previous management of Rio Tinto. His extensive knowledge of Mongolia’s political and economic situation has enabled him to negotiate with the government effectively. Moreover, his long experience as an investment banker has undoubtedly contributed to acquiring Turquoise Hill Resources at a favorable price. As a result, many of the risks that Oyutolgoi would have faced in the future have been mitigated. In less than two years as the head of the Copper Group, B.Bold has managed to solve the problems at Oyu Tolgoi. Now, Rio Tinto is not only a foreign investor in Mongolia but also a successful developer and owner of 66% of Oyutolgoi, as well as a special guest of “Mine Ger” for the Year of the Tiger. In the future, B.Bold will face major challenges such as the giant iron ore project Simandou and the lithium project Jadar, which will be even larger than Oyu Tolgoi. Concerning the Simandou project, he has successfully taken the first step and established a joint venture a few months ago.

Deirdre Lingenfelder is the first female CEO to lead Mongolia’s largest project. She is a significant figure and guest of honor in the Year of the Tiger, as the leader of one of the three companies that will take over Mine Ger. She is also one of the few female leaders in charge of major mining projects in Mongolia, apart from the heirs of the founders of “Monpolymet” and “MAK”. Mining has commenced at the Oyutolgoi underground mine, which has a total length of over 100 km and 62 km of tunnels constructed over the last four years. It is one of the few giant projects in the world. The previous CEOs of Oyu Tolgoi had specific tasks and deadlines for their implementation. Oyutolgoi is transitioning from the construction phase to sustainable production for complex projects such as open pits, concentrators, and underground mines. Therefore, Rio Tinto has decided to implement a sustainable development policy and appoint a management specialist, including a woman, to lead the project instead of an engineer. Ms. Deirdre was born in South Africa and has extensive experience working in African countries and Australia. Her appointment may initiate a major change in Mongolian mining. Since she took on her role, Oyutolgoi has seen an increase in female employees from 18% to 22% in a short period. The experience gained from Oyutolgoi, where women’s employment is traditionally low, is expected to contribute to increasing women’s participation in the mining industry and ensuring the project’s stable operation for many years to come.

“Energy Resources” is one of the largest private investors in the Mongolian coal industry, and it is now diversifying its portfolio. The company has been mining, beneficiating, and exporting coal since 2009. Starting from the Year of the Tiger, it has also entered the gold sector. The company has invested USD 40 million in “Erdene Mongolia” and acquired 50% of its main gold project. This is the first time that a Mongolian national mining company has invested in a promising project of other minerals that it does not own. CEO G.Battsengel, who has been leading the company for 15 years, announced his plans to invest in other mineral metals. He had faced a railway dispute and a conflict with a state-owned company for many years, which affected his company’s rating. This is a significant change for “Energy Resources” as it shifts its focus to minerals that have more future demand, makes a green transition from lignite, and plans for future investments. Moreover, G.Battsengel has been elected as Chairman of the Board of Directors of the Mongolian National Mining Association. His long experience will certainly contribute to establishing responsible, sustainable, and accessible mining development in Mongolia.

The partnership between “Energy Resources” and “Erdene Mongolia” has been mutually beneficial for both parties and for the parent company of the latter, “Erdene Resources Development”. This partnership has enabled Peter Akerley, who faced local opposition and could not start construction on the project, to support its operation through collaboration with a major Mongolian company. The Bayan Khundii gold deposit has approximately 15 tonnes of gold reserves. Peter Akerley is a diligent prospector who has spent nearly 20 years exploring Mongolia and is now planning to invest around USD 100 million. He is another notable figure and special guest at Mine Ger during the Year of the Tiger.

G.Erdenetuya has become the first female leader to be appointed as Executive Director of the Mongolian National Mining Association, which has had four directors so far. This appointment is a clear indication that the mining industry is no longer male-dominated. G.Erdenetuya has experience working at Boroo Gold, Oyu Tolgoi, and Khan Altai Resources. She has been involved in every stage of mining projects from exploration to production. She says she has thoroughly studied every problem faced in the implementation of mineral projects in Mongolia. Having handled the approval stage of the most successful projects in Mongolia, she has started to work on the great task of making Mongolian mining companies responsible and helping their operations to run smoothly and without obstacles. G.Erdenetuya announced that she will focus on the introduction of the “Responsible Mining Codex” in the mining sector in the coming years. This will be a big step towards establishing a stable mining industry that meets the interests of the local government, the government, and investors.

J.Ganbaatar, a two-term parliamentarian, has assumed the role of Minister of Mining and Heavy Industry. In his inaugural address to the industry, he expressed his commitment to “support responsible mining while also protecting the interests of both foreign and domestic investors”. The mining sector has welcomed his appointment as a former chair of the Standing Committee on Economic Affairs of the Parliament and a known advocate for their interests. He will have to tackle many challenges ahead, such as revising the Minerals Law. However, shortly after taking office, he faced a major crisis in the mining industry the “coal theft” scandal sparked political and social unrest and protests. The minister remained silent and distant on this issue and did not participate in any discussions to resolve the coal trade and transport logistics problems. Having served as a first-time cabinet member and a secondtime legislator, it remains to be seen whether he has learned from his past experiences how to handle this situation.

B.Delgersaikhan, a founder and shareholder of “Bold Tumur Eruu Gol”, one of Mongolia’s leading iron ore exporters and a current parliamentarian, has reaffirmed his commitment to the mining sector in the Year of the Tiger. He recognizes the importance of infrastructure and railways for the mining industry, especially for bulk commodities such as coal and iron ore. Over 10 years ago, he invested in building about 130 km of a railway to access the Bayangol iron ore deposit, which now serves many other mines. Last year, he completed and operated the 260-kilometer Zuunbayan-Khangi railway in just one year. This railway enables the transportation and export of Tavan Tolgoi coal through Khangi port. B. Delgersaikhan is the first Mongolian miner to build two private railways that have become a vital infrastructure for coal and iron ore exports. He has accomplished what the state had planned for years, making him a prominent figure in the Year of the Tiger. He is also working on constructing a metallurgical complex after completing the railway. Based on his progress, he is close to launching Mongolia’s first metallurgical complex that will add value to raw materials by producing final products such as railways and iron and steel complex factories. Thus, B.Delgersaikhan, as an iron ore deposit owner, is on his way to fulfilling the “Mongolian dream” of value-added production.