Multinational companies "Nuggets" Mongolian minerals Mongolian mining companies seeking overseas listing

With an area of ​​1.56 million square kilometers and a population of 2.8 million, Mongolia is one of the countries with the smallest population density in the world. Mongolia is rich in underground resources. More than 80 minerals such as copper, molybdenum, gold, silver, lead, zinc, rare earth, iron, fluorite, phosphorus, coal, and petroleum have been discovered. Mineral resources in Mongolia have great potential for development. The boom in the mining industry is sweeping across Mongolia. Mining companies from various countries flocked to Mongolia, and Chinese companies also made significant inroads into the Mongolian mining industry.

A mining expert who has been engaged in exploration work in Mongolia for a long time said that Mongolia is rich in mineral resources. In terms of non-ferrous metals, there are more small and rich surface mines. From the perspective of mining, the outlook is very promising. He said Mongolia’s mineral investment has always been a hot spot in the world. In Mongolia, you can meet "gold rushers" from various countries. Investors in Russia, the United States, Canada, and Australia have all taken mines in Mongolia. Many investors in Japan and South Korea have also visited this hot spot.

He said that Chinese enterprises in the mining of Mongolia are mainly concentrated in precious metals, non-ferrous metals, iron ore and coal. Looking at the list of mines and minerals in the *** can tell which minerals are of concern to Chinese companies.

Statistics from the Mongolian Bureau of Statistics show that in January this year, Mongolia exported 209 million U.S. dollars and imported 348 million U.S. dollars. From the perspective of export structure, mineral products export accounted for 91% of Mongolian total export revenue, of which 89% of mineral products entered the Chinese market. The substantial increase in imports was mainly due to the increase in import demand for technology and equipment related to mining development.

At present, there are more than 5,000 Chinese-funded enterprises registered in Mongolia. Chinese enterprises have preferred mine resources for investment in Mongolia and have also been extensively involved in mechanical construction and real estate. In recent years, Chinese-funded enterprises have also made many generous mining investments in Mongolia.

Mongolian mining companies seek overseas listing

Mongolia adopted the 2008-2012 development plan at the end of 2008 to accelerate the development of its strategic mines, maintain a sustained and steady growth of the Mongolian economy, and benefit the mining industry for every citizen. At present, there are 15 strategic mines in Mongolia, and the mining of each ore will have a huge impact on the Mongolian economy. Since Mongolia's current overall economic scale is modest, the development of each strategic mine will greatly promote the development of the Mongolian economy.

At present, the two strategic mines that the Mongolian government has focused on are the Tawang Tolgoi coal mine and the Oyu Tolgoi copper and gold mine.

The Tawang Tolgoi coal mine in the south of Mongolia is one of the largest undeveloped coal mines in the world, with an estimated reserves of over 6 billion tons. According to reports, Mongolia’s state-owned company intends to list the assets of the coal mine in Hong Kong, China, London, UK and Ulaanbaatar, Mongolia. In April this year, the Mongolian government decided that 50% of the shares in the Tawang Tolgoi coal mine will be held by the government, 30% of the shares will be sold to overseas investors through overseas exchanges, and 10% will be distributed to Mongolian citizens free of charge. National citizens can share a total of 1.5 billion shares of the company, and each citizen can freely allocate 536 shares of Tawang Tolgoi Mining Company.

The Oyu Tolgoi copper and gold mineral rights are currently owned by Ivanhoe Canada and Australian Rio Tinto. Oyu Tolgoi is one of the largest new copper and gold mines in the world. It is located on the Sino-Mongolian border, and the capital cost of development. It is estimated to be 4.6 billion U.S. dollars. According to Reuters, Rio Tinto is expected to gain control of the Oyu Tolgoi copper mine this year. Over the past few years, companies and individuals including Rio Tinto, Ivanhoe and others have engaged in intense competition for Oyu Tolgoi. Rio Tinto and Ivanhoe Gouda have reached an agreement to agree to a $3.7 billion purchase of shares in Oyu Tolgoi held by Ivanhoe. This transaction will increase Rio Tinto's share of Ivanhoe's shares held before January 2012 from 35% to 49%.

Opportunity and risk coexist

Miners reminded that Mongolia's mineral investment looks very beautiful, but the mining industry has always been a high-risk industry, and the majority of losers. Zheng Zhi, chairman of the Sino-Mining Coalition, said that a few years ago, the price of the Mongolian ore was very cheap, and now with the speculation in the capital market, prices have risen. In addition, exploration data of many mines in Mongolia are relatively early, and the reliability is relatively poor. It is necessary for companies to verify, otherwise it is easy to suffer losses.

In Mongolia's mineral investment, in addition to professional judgment errors, many people also pointed out risks in policies and other aspects.

The first is legal and policy risks. As a developing country, Mongolia’s policies and laws are also constantly improving. In July 2006, the Mongolian State passed a new "Mineral Act," and the "Mineral Act" passed in 1997 was subsequently repealed. The new bill sets out the criteria for the allocation of strategic minerals and defines the state's participation in minerals and the proportion of shares.

The new method classifies mines into three categories: strategic mines, general mines, and general mines. The bill stipulates that the production that is or can be carried out is enough to affect the economic and social development of the country, the country and the region, or that the annual output of the mine which accounts for more than 5% of the GDP is strategic mine. When working with private legal persons to mine strategic minerals that have been explored using state budget funds and have established reserves, the state’s shareholding can reach up to 50%; during the cooperative exploration and exploration process, there is no strategic mine using state budget funds, and the highest national level can hold the equivalent of Mine holders invest 34% of their shares.

Followed by the very limited capacity of the Mongolian railway, which has always been a bottleneck restricting Mongolia's mining development. Peng Junming suggested that investing in gold and copper mines in Mongolia is better. These two mines have relatively small requirements for transportation. However, the mining of some low value-added minerals in Mongolia and the relatively high transportation requirements of coal mines are difficult to transport. In April this year, Mongolia announced the start of the "first phase" of the railway construction project. The project includes the construction of a nearly 1,100-kilometer railway line between Sai Yin Shanda and Dalan Zada ​​Tada and Choba Mountain, which will promote the development of the Tawang Tolgoi coal mine.

In addition, Mongolia’s infrastructure is weak and it is a country that lacks electricity and lacks water. Many companies need to generate electricity on their own in local mining. Over the years, groundwater in Mongolia has been greatly reduced. Even if there is mine and no water, the mine cannot be mined. Due to the cold weather and large sandstorms in Mongolia, the start-up time in the year is only six months. Basically, it is suitable to start construction from May to November every year. All these will increase the investment cost of the company in disguise.

Li Hua (a pseudonym) of a headhunting company in Shanghai has been a bit busy lately. A resource company commissioned him to look for professionals who are proficient in iron ore and coking coal in Mongolia. Mongolia's rich mineral resources are attracting a large number of multinational corporations to come to the Nuggets.

Dr. Peng Junming of Beijing Capital Investment Fund pointed out that Mongolia is rich in resources. With the development of resources, the Mongolian economy is expected to continue its rapid development in the future and become a "middle East Asian country in Central Asia." Jun Investment has brought its investment partner this year to a billion tons of iron-copper associated mine in Mongolia.