D.Damba,
President of the Mongolian National Mining Association (MNMA), does not think
much good will come out of the government’s decision to extract the Tavan
Tolgoi deposit through operating contracts. Since the operating companies will
be required to make sizable investments, they will raise their costs at will,
and once the work starts the government will have to go along.

He also thinks splitting the deposit among many operators makes less sense than
allowing one big company to run the show. The Mongolian Government does not
have the resources to monitor the work of so many companies operating in
several areas in their different ways.

He regretted that the government had chosen to take decisions of such national
importance unilaterally, without seeking the views of professional
organizations like the MNMA, or of any other representative of the private
sector. Only government representatives were included in the working group. and
its recommendations were published in newspapers as a fait accompli. It
reinforces the perception that the government thinks it has a monopoly of
wisdom and sees no need to involve specialized organizations, or scientific
experts even in matters that go beyond politics.

Damba appreciated the Prime Minister’s expressions of support to Mongolian
companies getting a role to play in the project, but was not very enthusiastic
about the consortium of national companies that has come up. There is a
disturbing lack of clarity about how this is expected to function, and,
besides, its members include few companies with proven success in the mining
sector.