Since 2009 the Business Council of Mongolia with collaboration of Oyu Tolgoi LLC, is compiling a comprehensive database of potential suppliers and mining companies to the Mining Sector. Our aim is to help mining suppliers and mining companies grow their business and relation.

Mongolian Mining Supply Chain Database has been renewed and now ready for service. BCM urges all companies (mining suppliers and mining companies) in Mongolia who are or will be in Mongolia’s Minerals and Mining Sector to provide information for this Mining Supply Chain Database.

Business Council of Mongolia

MCS Holding is faced with a problem as it begins work on setting up a plant to produce coal gas for heating ger district households. It finds that like all other technical spirits, methanol, an essential component in producing coal gas, is in the list of items that are not allowed to be imported into Mongolia. The company hopes Parliament will agree to amend the present laws to remove the ban to help reduce air pollution.

Centerra Gold increased net income in the fourth quarter by 9.4%, thanks to a 22% year-on-year increase in gold prices. The company earned USD153.1 million, compared with USD140 million in the fourth quarter of 2009. Centerra owns the Kumtor mine, in Kyrgyzstan, and the Gatsuurt project in Mongolia. The firm ended operations at another Mongolian mine, Boroo, in November. Centerra had planned to replace the production from Boroo with ore from its Gatsuurt project, which is located about 50 km away. However, the firm is still waiting to hear how the project will be affected by a new water and forests law enacted in Mongolia and the final permitting for Gatsuurt will not be approved until the uncertainty under the new law is dealt with. CEO Stephen Lang last week said the company is “optimistic” the issue will be resolved, but the uncertainty over timing means Gatsuurt has not been included in 2011 forecasts

Australia-listed Haranga Resources Ltd. has announced commencement of its maiden drill program at the Shavdal iron ore project in Mongolia. This follows “excellent magnetic survey results” from the company’s flagship Selenge iron ore project

Ivanhoe Nickel & Platinum Ltd., the mining company known as Ivanplats, plans to go public this year in an offering that could raise between USD750 million and USD1 billion. Mr. Robert Friedland, the chief executive of Ivanhoe Mines Ltd., is a controlling shareholder of Ivanplats, with a stake of about 30%. Ivanhoe, which owns 8% of Ivanplats, is also considering its own sale or breakup. The potential public offering of Ivanplats comes as Mr. Friedland's other company, Ivanhoe, assesses its future options with the help of Citigroup, people familiar with the matter say. One plan would involve spinning off all its assets, except for a stake in Mongolia's Oyu Tolgoi mine, to shareholders, followed by an auction for the Mongolian asset, they said. Ivanhoe owns 66% of Oyu Tolgoi, one of the world's largest untapped gold and copper mines; the Mongolian government owns the rest.

In this scenario, Ivanhoe's assets in Kazakhstan, Australia, Indonesia and the Philippines would become a separate company led by Mr. Friedland. Another plan would involve Ivanhoe selling its stakes, except for Oyu Tolgoi, to individual buyers and then running an auction for the remainder of the company. Its Kazakhstan gold mine and Ivanhoe Australia are valued upward of USD1 billion each.

A third option is to run an auction for the entire company, although that could be difficult to do given that Anglo-Australian miner Rio Tinto owns 42.1% of Ivanhoe and has the right to raise its stake to 49%. Mr. Friedland owns 15.5% of Ivanhoe. In 2006, Mr. Friedland was lauded in the mining industry for securing Rio as a partner to develop the Oyu Tolgoi mine. But the project's future had been up in the air amid a dispute between Ivanhoe and Rio over Ivanhoe's desire to raise equity to fund the project. After the two sides settled their spat in December, Ivanhoe on January 27 said that it had raised almost USD1.2 billion in a rights offering. The funding will help finance construction of the gold and copper mines in southern Mongolia. While Rio doesn't have a direct stake in Oyu Tolgoi, it effectively has operating control of it because of its position in Ivanhoe.

The talks about the future of Ivanhoe and its Mongolian mines are still under way and a final decision has yet to be made, people familiar with the matter say. That could happen over the next few months, and before January 2012, when a standstill agreement between Rio and Ivanhoe ends.