Finchannel reported that EBRD is taking an equity stake in a privately held Mongolian mining operation, in an investment that will strengthen the role of the private sector in this crucial industry, boost competition and set a new benchmark in environmental and health and safety standards.
According to EBRD, the investment of up to EUR 30 million in Energy Resources LLC will support the production of high quality coking coal from the Ukhaa Hudag deposit in southern Mongolia, some 200 kilometers north of the border with China, a major importer of Mongolian coal.
EBRD's backing for project will also help to bring sustainable economic growth to this region at the foot of the Gobi desert, stimulating new enterprise in an otherwise depressed area.
Energy Resources is an entirely Mongolian consortium, comprising three large domestic groups. This project, at a mine which has a future expected production life of over 100 years will allow ER to compete with the Mongolian state mining industry and with larger foreign investors.
By working initially with one of the world’s foremost international contract mining operators, ER will also ensure that the mine is operated according to the highest industrial standards. EBRD’s investment also reflects the company’s commitment to high governance and transparency as well as environmental and health and safety standards.
Mr John Chomel Doe director of EBRD said that “The EBRD is particularly proud to be associated with this project that will raise standards in the Mongolian mining industry, support the growth of the private sector and bring a new spirit of economic dynamism to this region.”
Mr J Odjargal chairman of Energy Resources said that “ER is very pleased that EBRD is joining the UHG project that would create 450 jobs immediately, especially during these times of crises when business opportunities are limited and the country’s foreign currency reserves are scarce.”
While developing the main mining project, Energy Resources will also work with the EBRD’s TurnAround Management and Business Advisory Services Programs that help enterprises adapt to the demands of a market economy. The TAM/BAS projects will support economic development in the Gobi region by helping small businesses expand and so support the long term development of the region.
The EBRD started investing in Mongolia in October 2006 and has made provision of finance to the support the mining and mining services sector a priority. However, its total investments to date of around USD 120 million have stretched across a wide range of sectors also including the financial, the retail and the beverages industries.
(Sourced from www.finchannel.com)
