QSC’s concession agreement terminated

During its weekly meeting on April 13, Cabinet nullified Resolution No. 69 of February 28, 2015 on establishing concession agreements.

Relevant officials were ordered to send a notice about the termination of the concession agreement on implementing a mining and metallurgical complex project, which was established between the Ministry of Economic Development and QSC Company on April 4, 2014, to the company and transfer the management and assets of Darkhan Metallurgical Plant JSC back from QSC.

The concession agreement states that the competent entity has to submit a proposal to terminate the agreement to Cabinet on the basis that the project could not continue as project activities have stopped for more than two years due to an error by the concession holder.

Finance Minister B.Javkhlan explained that the concession agreement provides for a total of six works, but they have not been completed.

The concession holder, in particular, has not built the metallurgical plant with an annual capacity of no less than 500,000 tons or carried out extensions and upgrades to bring the capacity of the Darkhan Metallurgical Plant to 300,000 tons per year.

The government views that the project became inactive because QSC failed to complete the planned measures of the project for expanding the Darkhan metallurgical plant and developing a mining and metallurgical complex in the eight years since the establishment of the agreement. The government concluded that the company is not capable of implementing the project.