Preliminary cost estimate for locally refined oil is 850 MNT per liter

The Ministry of Mining and Heavy Industry briefed on key operations at the regular Responsible and Transparent Mining Meeting on Thursday...

The Ministry of Mining and Heavy Industry briefed on key operations at the regular Responsible and Transparent Mining Meeting on Thursday.

Minister D.Sumiyabazar shared important information regarding the ongoing oil refinery project. A preliminary estimate shows that opening an oil refinery will lower the production cost of a liter of petroleum to 850 MNT.

“The infrastructure work of an oil refinery is at around 80 percent of completion. The average cost of a liter of petroleum produced by the refinery is estimated to be approximately 850 MNT. I had a video conference with CEO of Rosneft Igor Sechin yesterday at 8:00 p.m. Next year, a representative from the Ministry of Mining and Heavy Industry and workforce of the oil refinery project will visit Russia, assemble related documents and sign a cooperation agreement within the first quarter of the year,” D.Sumiyabazar stated.

As of November 2018, the mining and heavy industry sector generated 1.9 trillion MNT. This is a 37 percent rise compared the same period of last year. The production of industrial products reached 14.1 trillion MNT, up 19.5 percent, or by 2.3 trillion MNT, since November 2017, the ministry reported.

The overall industrial production amounted to 10.2 trillion MNT, surging by 18.3 percent in the reference period. It was reported that this growth was mainly driven by increases of 1.3 trillion MNT (up 57.9 percent) in coal mining and 175.7 billion MNT (up 3.2 percent) in metallurgical mining.

A breakdown of the total industrial production by the end of November is listed below.

• 44.4 million tons of coal

• 1.203 million tons of copper concentrate

• 19.2 tons of gold

• 4,900 tons of molybdenum concentrate

• 3.2 million tons of iron ore concentrate

• 67,900 tons of fluorspar concentrate

• 77,800 tons of zinc concentrate

• 5.8 million barrels of crude oil

• 13,000 tons of cathode copper

The ministry then provided an update on the IPO of Erdenes Tavan Tolgoi JSC. It said that the preparation of the release of IPO is going well and that the company has restructured changed its operating procedures after holding a shareholders’ meeting on October 19. The board of directors gave permission to establish independent or joint subsidiary company that meets the requirements of foreign and domestic stock exchanges.

Within the scope of the legal regulation of securities market relations, the Ministry of Mining and Heavy Industry will select a reliable consulting service provider for issuing securities in international and domestic markets step-by-step. As of December 20, four participants specialized in auditing, legal, financial and technical qualifications had gone to the final stage.

By January or February 2019, the ministry hopes to finish selecting all parties required for registering in the local stock exchange. Erdenes Tavan Tolgoi is keeping a close tab on its internal affairs and is striving to create a database of all information needed by professional bodies, Minister D.Sumiyabazar underlined.