Source: The Mongolian Mining Journal    Date: May 12, 2010

The Prime Minister has made it clear that the Oyu Tolgoi agreement is not an inviolate template and the decision on Tavan Tolgoi will stay clear of the mistakes in it. He has identified the principal areas where the departure will be seen.  Mongolian companies and individuals will play a larger role in developing the project in cooperation with foreign investors and operators, and the benefit to national interests will be the main criterion for selection of the investor(s). Preference will be given to companies and consortiums with their national Government behind them. Not only will the “advance payment” demanded be “much more than in the case of Oyu Tolgoi”, but the Prime Minister has indicated that selection of their companies would be conditional on Russia and China agreeing to reduce transit transport rates and, in the case of Russia, on its agreeing to buy more meat from Mongolia. With regard to the USA, the demand will extend to a free trade agreement and offering opportunities for young Mongolians to study in the USA. Advance payment will thus not be in cash only. There would be other demands also, such as a USD2 billion fund for the infrastructure projects in the southern Gobi region, setting up of value added production plants, and import of advanced technology.