Prime Minister S.Batbold yesterday met with the working group on Tavantolgoi, set up by Parliament to prepare general procedures for exploiting the mine. The group consists of representatives from the Ministries for Mineral and Energy, Finance, Nature, Environment and Tourism, and Internal Affairs and from the Government Property Bureau.

The Prime Minister stressed the importance to establish tin, coked coal and chemicals factories so that value added products based on the output from this strategic deposit could be manufactured. This will need development of infrastructure and a legal framework. The Minister for Nature, Environment and Tourism said the group is ready to present plans for infrastructure, railways and water reserve to the Government. Norwest  of Canada worked as a technical consultant. It is now felt that the Sankhi deposit’s total worth is USD5 billion than originally estimated. 

Parliament has directed that the first exports from Tavantolgoi must be made by 2012. The Minister said soil removing work must start this summer. The working group considered two options: whether it was better to attract foreign investors with the state keeping 51 percent ownership, or to keep 100 percent ownership and hire international operating companies for a fee.

Batbold said the mine should be owned fully by the state and advised the group to work on the second option. Altogether 11 companies or consortiums from Russia, China, India, Japan, Brazil and South Korea have expressed interest in investing in Tavantolgoi. The tender will be announced this summer.

The electricity needs are proposed to be met by establishing a power station with a capacity of 100 mw in the first place, to be later raised to 600 mw. The next big problem is a railway to transport the coal. There are two options: Tavantolgoi-Zuunbayan-Sainshand and Tavantolgoi-Oyutolgoi-Gashuunsukhait. The Ministry for Road, Transportation, Construction and City Development is working on the issue.

The water issue is also important. The closest water source to the deposit is Balgas Ulaan Lake, 65 km way. The lake however can provide only about half the mine’s needs. The Ministry for Nature, Environment and Tourism will have to find other sources.

The Prime Minister instructed the group to finish its work before the Spring session of Parliament. The Government will finish negotiations with investors during that session.