Driving Strategic transformation of Erdenes Mongol (2015-2017) 2016 оны 8 сарын 18

Erdenes Mongol LLC (“Erdenes Mongol” or the “Company”) has a multi-dimensional mission to become a leading investment company with an international levels of competitiveness in Mongolia’s key economic sectors, including mining, infrastructure, and energy.

The Company, today, is employing over 10,000 workforce through its subsidiaries and affiliates. Erdenes Mongol is strongly committed to ethical business practices and international standards, and strive for transparency and independence in corporate governance.

Strategic transformation of Erdenes Mongol, from a state owned enterprise to become an independent investment company, is a matter of the highest importance. Since 2015, we are developing our own corporate model based off world leading successful corporations - Temasek, General Electric, Rio Tinto, and BHP Billiton – and following their strategies and operating models.

Erdenes Mongol will generate returns for country’s strategic and social development, by accelerating the transformation process:  

  • Creating opportunities for citizens to be employed, increasing pool of internationally-competitive skilled Mongolian  workforce
  • Generate dividends for every citizens of Mongolia from stated owned Mongolian companies
  • Sustain and stimulate economic growth of Mongolia through professionalising and enhancing our existing businesses
  • Provides funding support and attracts world-class partners to its projects
  • Keeps our position of being largest contributor to the country’s state budget
  • Manages our strategic mining assets with a low opex and capex approach, and diversifies our asset-base into economic infrastructure and energy that Mongolia needs

Changes in law has allowed Erdenes Mongol to act as a private commercial company

Parliament of Mongolia, in February, has approved the regulatory changes for amendments to the Human Development Fund Law, where Erdenes Mongol aimed to professionalize the company Board and management composition and help it to operate as a commercial entity.

Developing formal corporate governance and organizational culture

For the Company to run as a commercial entity, commitment to good corporate governance is the key basis. To align Erdenes Mongol’s governance, including codes and policies, with international standards, we have started cooperating with International Finance Corporation (“IFC”) to assess our corporate strategy and governance.

To reinforce the autonomy and authority of Erdenes Mongol Board of Directors (“BoD”) as well as to enhance skill sets and improve overall engagement, we have started attracting international talents. This allows Erdenes Mongol to strengthen the functional effectiveness of the BoD, including putting in place more structured frameworks on governance.

Reduce loss occurred for Government of Mongolia owned companies, and promote healthy pipeline of projects

Erdenes Mongol has obtained Asian Development Bank fund, to provide support to the strengthening institutional framework and management capacity of the Company. The proceeds envisages Erdenes Mongol to form an integrated proper management system for investment decision making, sound corporate governance, and prudent risk management. Within 6 years, the ADB loan will provide total MNT3.3 trillion to the state budget, including MNT2 trillion in Royalties, MNT825 billion in VAT, WHT & Others, and MNT518 billion in dividends.

IFRS compliant financials is allowing Erdenes Mongol to raise funds from international capital market

One of big fours of IFRS Standards, “Ernst and Young” has audited Erdenes Mongol and our subsidiaries. As a result, Erdenes Mongol now holds  integrated financial statements as a Group that are internationally accredited.

For us to raise financing from international capital markets, investors will initially look at IFRS audited financials. We are now in a unique position and prepared to provide funding support and attracts world-class partners for our portfolio projects. To expand our investor base as well as decreasing our cost of borrowing, we are now working to have Erdenes Mongol rated by one of the credit rating agencies.

Oyu Tolgoi – World class copper mine

After just three years since it started operations, Oyu Tolgoi is a world class mining operation that is contributing to Mongolian economy. In 2015, it was the country's largest tax payer. Last December, a Project Financing agreement of USD4.4 billion with 20 international banks and financial institutions to fund the Oyu Tolgoi development was signed. The project finance deal is highly valued in international market and retrieves investors’ credibility of Mongolia. As of today, Oyu Tolgoi  employs over 7,600 workforce and there has been over 1,000 more Mongolians employed since underground mining has started.

Paid MNT 1.8 trillion to the State Budget

Erdenes Mongol owns a world class assets with long-term high cash-generation potential, including Oyu Tolgoi, Tavan Tolgoi, Baganuur and Shivee Ovoo. We have paid MNT1.8 trillion as taxes and fees to the State Budget, from 2012-2015.

International levels of competitiveness

By successfully negotiating the settlement for Oyu Tolgoi, has improved our partner relationship with lending partners as well as cooperation and coordination. We are now maintaining key relationships with the alliances of global leaders from Oyu Tolgoi project financing, including Asian Development Bank (ADB), European Bank for Reconstruction and Development (EBRD), Export Development Canada (EDC), Singapore’s Temasek Holding, and other sovereign wealth funds.

We are in the middle of establishing and exercising best international standards of technology, financial, and management. Achieving international levels of competitiveness is Erdenes Mongol’s key focus. Thus, Erdenes Mongol will strive for a credit lines to finance our projects.  

 

 

 

Enquries:

S.Solongo, +976 9900 0963, s.solongo@erdenesmongol.mn

Contact Us

15th floor, Chinggis Avenue 15 1st khoroo
Sukhbaatar District Ulaanbaatar 14240 Mongolia
+976 7555 - 3399
info@erdenesmongol.mn

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