GOM sets up two flagship firms in charge of copper and coal industries

The two groups will implement several policies for key minerals, including austerity measures, improving the efficiency of stateowned enterprises, and establishment of a Wealth Fund. Although the exact structure has not been announced yet, Prime Minister Oyun-Erdene.L emphasized that the two companies will be named: “Copper and Non-Ferrous Metal Group” and “Coal and Energy Group”.

Erdenes Tavan Tolgoi JSC, Mongolia’s largest coal exporter managing one of the key operations at the Tavan Tolgoi residual deposits, as well as Shivee Ovoo and Baganuur thermal coal deposits supplying domestic power plants, will be part of the group’s management. There are also ongoing talks on integrating some small-scale locally-owned thermal coal miners under the group’s management. In particular, 51% of Tavantolgoi, one of the locally-owned coking coal exporters, can be transferred to Coal and Energy Group. The group is expected to play a key role in rail transport.

Erdenes Tavan Tolgoi JSC is the main financier and shareholder of the new railway en route from Tavan Tolgoi to Gashuun Sukhait and Zuunbayan. As a result, the Coal and Energy Group is expected to account for 70-80 percent of Mongolia’s coal production. The General Director of Erdenet Mining Corporation (EMC) SOE Badamsuren.Kh is being appointed as the CEO of Copper and Non-Ferrous Metals Group. In addition, the group will be responsible for Erdenes Oyu Tolgoi LLC, which owns 34 percent of the Oyu Tolgoi project. It will also be in charge of Erdenes Gold Resources, a state-owned gold exploration firm that owns the Asgat silver deposit, and Erdenes Silver Resources LLC, the owner of the Salkhit silver deposit, Mongolrostsvetmet SOE, and several new gold and silver exploration projects.

Mongolrostsvetmet is a state-owned miner currently producing gold, iron ore, and fluorspar. Erdenes Silver Resources and Erdenes Mongol own 4-5 promising gold projects, the largest of which is the Ovoot Khyar project, which has 53 tonnes of gold reserves. The group’s reorganization will lead to the downsizing of the board of directors of the subsidiaries, the consolidation of duplicate functions, and the transfer of responsibilities to the group’s management. The companies led by Badamsuren.Kh and Gankhuyag.B have borne the brunt of the economic and fiscal burden during the pandemic crisis, and are currently successfully implementing major projects in the mining sector. In addition, due to strong political support, they will be appointed uncontested as the directors of the Erdenes Mongol’s new subsidiaries and a long list of directors will follow this.