News.mn spoke to Minister of Mongolia M.Enkhsaikhan about the progress of Tavan Tolgoi negotiations. He said that the Tavan Togloi discussions are on hold for a while. to address the issue of Erdenes Tavan Tolgoi's debt to be paid to Chalco.

Mongolia concluded an agreement with Chinese Company Chalco in 2011, to pay back 350 million USD in loans through the delivery of coal.  All citizens are familiar with the agreement because the money was spent on social welfare allowances for all Mongolian citizens. Presently, 150 million USD from this debt has not been paid.  

The agreement with Chalco hasn’t been talked about recently until today. Why is this? Do the investors know about it?

About this agreement, only now are these issues being discussed because this agreement concluded with Erdenes Tavan Tolgoi involved a private third party.

Now detailed issues are being revealed and bringing barriers to the discussion

Can we terminate the agreement with Chalco?

Yes, we can. In this case, the Mongolian government will have to pay 50 million USD and the case will be resolved in an arbitration court in New York.

Chalco may claim the profits earned for the next five to six years and the government will have to pay this debt to Chalco. This is the agreement we have concluded.

So what are we supposed to do now?

Of course we will work to find a resolution. This is a difficult issue. In case we can't decide on this issue, we’ll be left with a  debt to Chalco of 150 million USD.

Presently, we are paying 12 percent interest rate fees on this 150 million USD. Moreover, they are not interested in receiving payment by coal, because coal prices half fallen greatly in the global market.