President Ts. Elbegdorj recently through his support behind Energy Resources LLC after news spread of a possible sustainability agreement between that firm and the government.

The president visited Energy Resources during a tour through the countryside that took him to the Gobi Desert and its provinces. He supported the idea of a sustainability agreement and said Mongolia must do more to support its domestic investors. In the past the government has only committed to this kind of agreement with foreign investors, said the president, and he welcomed the opportunity to strike such a deal with a national firm.

A sustainability agreement would normally extend for 30 years, and if the investment exceeded USD 300 million, Mongolian law strongly encourages business with that investor. The company plans to build and has already built infrastructure surrounding its Ukhaa Khudag coal mine, including a processing factory, a thermal power station, a water supply system, roads, and housing blocks. Total investment thus far comes to some USD 600 million and will reportedly reach USD 750 million by the end of 2012. Investments funds have come from the stock market and long-term financing.

J. Odjargal, chairman of Energy Resources' board directors, said that the deal was not a scheme for tax breaks and that his company would continue paying its taxes at the same rates. He added that mining operations at Ukhaa Khudag will continue for 20 years and that his company would like to make a deal for 15 years.