Source: The Mongolian Mining Journal                          Date: 22 April, 2011

In a recent wide-ranging interview with the Mongolian National Broadcasting Channel, Mr. D.Sugar, Chairman of the State Property Committee (SPC), has said each of the 53,336 local business entities will get 28,123 shares in Erdenes Tavan Tolgoi, but “sale of these shares may be held back, as our consultants say 10% is too high a figure to be distributed that way”. Their concern is that “so many shares put cheaply into the market could affect the general share value, as they can be privately traded before offered on the secondary market”, he said. He has heard that deals are being made to acquire small companies so as to claim shares at a cheap price, and said, “This is not how we intend things to go and I warn companies acquiring small companies that they are taking a big risk. Several authorities will check everything thoroughly. Any suspicious transaction will mean cancellation of the shares issued.” He also advised the selling companies “to be patient”, as these shares will be “more profitable in the long run than opting for quick money now”. Mr. Sugar rejected any suggestion that politicians put pressure on the SPC. At one level it is true that “all decisions are in fact taken at the political level, as it is politicians who are in Parliament and in government”, and Mr. Sugar admitted it will be correct to say “just 5 Ministers are involved in taking all major decisions” on Tavan Tolgoi. “That is the way it works and it has to be so as it is not possible to call a Cabinet meeting every day,” he said, explaining that accordingly the Government set up a working group of 5 Ministers headed by the Prime Minister to work on the job. “We report to them, but the Ministers do not tell us what to report, and a charge of political interference can be made only if someone pressures us to include or omit any specific candidate. Nothing like that has happened so far, but I can’t say what will happen in the future.”