Guest Post: Questions about Purchase of Erdenet Mining

Note: I am unable to corroborate what Lkhagva is reporting here, but a) I know him to be a committed investigative journalist, and b) this is a potentially important story given the significance of the Erdenet mine to Mongolia, not just its economy, but also its identity.  – Julian Dierkes

By Lkhagva Erdene

Mongolian Ruling Party Questions the Legality of Hush Mine Deal with Russia

Investigation and debate by MongolTV journalist shed new light on a secret US$400 million deal involving two of the biggest state owned mines in the country.

The announcement

On June 28th, day before the country goes to vote Prime Minister of Mongolia Chimed Saikhanbileg announced the transaction of Russian shares of the largest copper and molybdenum mine to a Mongolian company called Mongolian Copper Corporation.

“I am announcing today that the Erdenet Mining Corporation is under 100% Mongolian ownership. Mongolian company now owns the 49 percent share once belonged to Rostec, Russian SOE. I would like to highlight the decision was concluded at the highest level or Russian government.”,

After the announcement, political party Mongolian People’s Revolutionary party which holds 3 seat in current cabinet strongly condemn the sale while main opposition Mongolian People’s Party issued an statement calling the sale illegal. MP Su Batbold delivered the statement “The share belongs to the Mongolian people. This deal is given to an unknown company that was only incorporated two years ago called Mongolian Copper Corporation run by an executive who is only 28 years old. No action can justify this deal.”

June 29th – Election Day

Mongolian voters went to the polls giving landslide victory to Mongolian People’s Party with 65 seats out of 76 seats.

June 30th – Rostec confirms the sale

Rostec issued a press release confirming the sale of the shares hailing the “beneficial market conditions for both the Russian and Mongolian sides”

“At the root of the sale of 49% of shares in Erdenet Mining Corporation LLC is a studied approach to managing its mining companies and implementing an individual approach with respect to different assets in accordance with Rostec’s strategic benchmarks. The sale of 49% of shares in Erdenet Mining Corporation LLC and Mongolrostsvetmet LLC is Rostec’s largest deal in the real economy, as a result of which the corporation’s budget received its largest ever single cash input…” said Rostec’s CEO Sergei Chemezov

Mongolian Copper Corporation (

Before the PM’s announcement Mongolian business and political circle has unheard of the Mongolian Copper Corporation. The company is “fully owned by a consortium of leading Mongolian companies” according to the press release by Rostec.

The official address on the company website “Suite 401” at the Blue Sky Tower was occupied by National News Corporation and BloombergTV Mongolia staff. Staff had no knowledge of such corporation.

BloombergTV Mongolia is owned by TDB Media LLC subsidiary of Trade and Development Bank of Mongolia

Trade and Development Bank of Mongolia helped advise and finance the mine deal according to the CEO of the bank Onon Orkhon.

Mongolian Copper Corporation is wholly owned by a Mongolian citizen named Purevtuvshin. The deal was concluded at US 400 million. 200 million was financed by the corporation and 200 million was a credit from Trade and Development Bank to Mongolian Copper Corporation said Orkhon during the live TV panel organized by MongolTV. The deal was highly secretive given the (geo)political situation, Orkhon added.

The debate – July 4th – Hush deal and uninformed public

MongolTV called for panel debate on the mine sale asking relevant decision makers, bankers close to the deal and lawyers into a popular debate show titled “Nuudel Shiidel”. Prior to the debate an online poll showed 80 percent of the public had no information of the state owned mine share to MCC. /1900 people took the poll as of 12:10pm of July 5th/

Ministry of Finance sources told MongolTV the announcement came as surprise to relevant government officials within the ministry. Erdenebileg Erdenejamiyan, Deputy Leader of Mongolian People’s Revolutionary Party confirmed the account citing cabinet members from his party enquired about the mine sale from the PM only to be ignored by the cabinet leader. Erdenejamiyan served as Deputy Justice Minister in the previous cabinet.

Debate shed new light on the details of the deal raising more concerns of the legality of the deal.

“According to Mongolian law on strategic mines (Erdenet mine is listed 11th on the strategic mine list) parliament has to approve the sale of stake in the mine” said Oyunsaikhan Altangerel lawyer, defense attorney who previously worked for the Justice Ministry of Mongolia.

“The main question is why Russia is exiting Mongolian market shying away from their strategic interest. I am more interested in that context rather than looking at this as a business deal.” Member of Parliament former Defense Minister of Mongolia Jadamba Enkhbayar

Government approval

Jargalsaikhan Dambadarjaa independent journalist shared new information on cabinet approval from Mongolian government letter dated June 13th sent from Ministry of Foreign Affairs confirming the sale by declining the Rostec initial offer to government of Mongolia. “Russian government Medvedev agreed to the sale only if cabinet approval from the Mongolian counterpart on June 2nd on government website.”

Jadamba Enkhbayar who’s party now represents super majority in Mongolian Parliament asked for parliamentary probe and hearing into this deal by concluding “The Mongolian people voted for our party to investigative and return the public asset. We will have to deliver. That is what we promised.”

Will the Mongolian government change their decision with the new parliament swearing-in today? Will the deal taint a longstanding relationship between the two countries? Feel free to weigh in on the discussion or add your input to

About Lkhagva E

Lkhagva Erdene is an investigative journalist based in Mongolia. He is the executive producer of news at MongolTV, commercial broadcaster in Mongolia. He is currently working on the Panama Papers leak with The International Consortium of Investigative Journalists.

You can watch the full debate in Mongolian from MongolTV Youtube Channel







About Julian Dierkes

Julian Dierkes is a sociologist by training (PhD Princeton Univ) and a Mongolist by choice and passion since around 2005. He teaches in the Master of Public Policy and Global Affairs at the University of British Columbia in Vancouver, Canada. He toots and tweets @jdierkes
This entry was posted in Erdenet, Ikh Khural 2016, Lkhagva Erdene, Mining, Mining Governance, Russia and tagged . Bookmark the permalink.

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