Six-month emergency regime announced for Erdenet Mining CorporationVideo
The Cabinet on March 6 issued a resolution to set an emergency regime for six months at Erdenet Mining Corporation and Mongolrostsvetmet LLC based on the Law on Government and other related laws. During the period of emergency regime, there will not be interruptions in operations of Erdenet Mining Corporation and Mongolrostsvetmet LLC and financial documents will be inspected only. The Prime Minister set up a working group to implement the resolution.
On February 27, the Government made a decision to declassify the minutes of Cabinet meeting of which the privatization of 49 percent shares of the Erdenet Mining Corporation (EMC) was discussed and other related documents. Head of the Cabinet Secretariat of Government L.Oyun-Erdene reported that the Government did not accuse a transfer of 49 percent shares of the EMC into a Mongolian private company and documents which can prove a hypothesis that the state property might be illegally purchased by state money is becoming available to the public. “Mongolian Copper Corporation (MCC) purchased 49 percent shares of EMC at USD 400 million 270 thousand. 72.4 percent of the funding was raised from the state and 27.6 percent from Trade and Development Bank. The financial sources of MCC causes the situation to inspect whether the financing has connection with criminal activity of money laundering.
EMC, one of the largest copper mine in Asia, set up in 1973 and started its production in 1978 as a joint venture between the Soviet Union owning 51 percent, and Mongolia the rest. A review of the agreement led to a reversal of the ownership structure in 1991, giving Mongolia 51 percent and Russia 49 percent. State Corporation Rostec of Russia made a decision to sell the 49 percent stake in joint ventures Erdenet and Mongolrostsvetmet offering it to the Mongolian side according to joint agreement. However, the Government of Mongolia of that time refused its preference to buy the 49 percent stake and MCC bought it.
Mr.L.Oyun-Erdene gave some information concerning how Mongolian Copper Corporation (MCC) raised its funding, who were owners of the companies that partnered for the deal, as well as how many transactions were made from the Bank of Mongolia, the Ministry of Finance and the Development Bank of Mongolia and in what ways. He also accuses then Government for the refusal of buying the stake even though the facts show that the Government had sufficient source to buy it. Mr.Oyun-Erdene underscored that the minutes of Cabinet meeting of that particular period evidenced the connection between the Trade and Development Bank and MCC.