Confusion over Olon Ovoot license continues
There is still no official confirmation or denial of reports that Goldman Sachs has filed a case against Mongolia in the international arbitration tribunal regarding the Olon-Ovoot gold mine. Ts.Myanganbayar, then by director of Mongol Gazar, is reported to have mortgaged the mine to secure loans from Anod and Zoos banks, apart from Goldman Sachs. His failure to repay the loans was a major factor behind the collapse of both banks.
The Executive Director of Olon-Ovoot Gold Company, D.Enkhtuya, has claimed that her company presently holds the license for the mine. Since the Mineral Department had permitted the illegal mortgages, there is suspicion that it issued a fresh license for Enkhtuya. It can be that Goldman Sachs has the original license.
The Director of Geology in the Mineral Department, L.Davaatsogt, has said they have no information about the Goldman Sachs case. He has also said the mining license mortgaged to banks was canceled in November, 2009 because it was illegal. A new license was issued in the name of Olon-Ovoot Gold Company. In the circumstances, whatever licenses was placed with Goldman Sachs as surety for a loan has no validity. The company has sought information on the issue.
Goldman Sachs investment bank does not have a branch in Mongolia and thus has no legal right to enter into any commercial transaction here. Actually the Olon-Ovoot license was mortgaged to a company named Goldman Sachs International. The Mongolian side overlooked the rule that mining licenses can be mortgaged to only banks and non-banking financial organizations.
Thus, Mongolian side has urgently corrected its mistake and canceled the license.