The European Bank for Reconstruction and Development (EBRD) has committed its biggest investment in Mongolia to date by providing a US$180mn loan for a coal washing plant.
Private Mongolian mining company Energy Resources, which owns and operates the Ukhaa Kudag coal mine and in which the EBRD holds a minority stake, will receive the financing.
The loan will be used to fund the construction of a coal handling and preparation plant at the Ukhaa mine, with a focus on the plant being built to the highest environmental standards.
The new plant will boost Energy Resources’ capacity for exports, particularly to Chinese and Southeast Asian markets.
Riccardo Puliti, managing director for the EBRD’s energy business group, remarks: “This project will embed the highest international standards in the mining industry in Mongolia, serving as a great example to follow by other players in the sector. The EBRD’s investment will have wider positive implications in Mongolia by creating new business opportunities for local companies servicing the mining industry.”
The funding is a testament to how well the mine is run, explains Jambaljamts Odjargal, chairman of Energy Resources: “It is an important validation of the quality of the mine and the operational, safety and environmental standards which we adhere to. I am pleased to have such a prestigious financial institution to take an interest in our mining operations and support our economy.”
This comes at a time when the EBRD has offered Mongolia’s XacBank an US$8mn loan for on-lending to local micro, small and medium-sized enterprises.
Philip ter Woort, head of the EBRD’s office in Mongolia, comments: “With this transaction and in close cooperation with our partner bank XacBank, the EBRD is deepening its support for the Mongolian micro and small enterprise sector, which is essential for private sector growth in Mongolia.”
Last Updated July 07, 2010
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