Yesterday’s
regular meeting of the Government took the formal final decision to establish
Erdenes Tavantolgoi LLC and asked related ministries to take the necessary
steps for this.
Briefing media after the meeting the head of the Government Secretariat,
Ch.Khurelbaatar, said ownership of the company will be divided into 15 billion
shares and 10% of this will be equally distributed among all citizens. Another
10% will be sold at a pre-determined price to business entities, and 30% more will
be traded at domestic and foreign stock exchanges. The recent successful IPO of
the MMC at the Hong Kong Exchanges, where it raised about USD700 million by
selling 25% of its shares, indicates that Erdenes Tavantolgoi also could
attract domestic and foreign investors after some preparatory work.

Work on issue of shares to citizens will begin only after the present civil registration
program and then the census are over. These will give a clear idea of how many
citizens have to be allotted shares. The Ministry of Finance will list national
business entities that are registered and have paid all taxes regularly. The
State Property Committee (SPC) and Erdenes MGL have been asked to arrange for the
initial capital for Erdenes Tavantolgoi.

The
Government will secure the services of an investment bank and other
professional experts to determine the price at which shares will be offered in
a public sale. Erdenes Tavantolgoi shares 
should not sell for less than the price paid for Energy Resources shares
at  Hong Kong.

Khurelbaatar said the Tavantolgoi deposit has two main parts, one of which will
be mined by a company selected as operator by Erdenes Tavantolgoi.  The first stage of the selection is over and
the choice is now limited to three companies, two Australian and one German,
and will be made in November. The other part of the deposit will be mined by foreign
investors and a group led by the First Deputy Prime Minister is working on the
issue. He said yesterday’s meeting also decided to begin talks on transit
transportation and advance payment. The SPC and Erdenes MGL have progressed on
selection of managing officials for the new company and will announce the names
when they decide on them.

Khurelbaatar rejected any suggestion that Energy Resources raised funds giving
investors the mistaken idea that it owned more of Tavantolgoi than it actually
did.