Erdenes TT LLC is seeking a re-negotiation with Chinese state-owned Aluminum producer Chalco on the 250 million US dollar coal-supply deal because of devalued coal prices. Chalco has refused to re-negotiate on the terms of the agreement and have threatened to take legal action.

The Chinese Ambassador extraordinary and plenipotentiary to Mongolia, Wang Xiaolong, has made statement on the issues.

The Chinese Ambassador, Wang Xiaolong, said in the statement “the agreement was disigned to be mutually beneficial from the beginning. Therefore we should continue with the implementation of the agreement. We also encourage Shenhua Group who is bidding for West Tsankhi at the Tavan Tolgoi deposit. We will stand strong on our side. The coal prices were based on many considerations.

The price of coal export from Mongolia to China was changed last year. It was influenced by market forces.  The coal price had fallen not only in China but also on the world market. During this time only Chalco agreed to buy coal from Mongolia. Today Erdenes TT is facing financial restraints. But it is not because of Chalco.

Therefore it is not appropriate to blame Chalco for the conditions experienced now.”