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Report Date : |
24.06.2014 |
IDENTIFICATION DETAILS
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Name : |
ERDENET MINING CORPORATION LLC |
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Registered Office : |
Amariin Square 1, Bayan-Undur Soum, Erdenet 213900, Orkhon Aimag |
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Country : |
Mongolia |
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Date of Incorporation : |
22.11.1973 |
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Com. Reg. No.: |
9019008085 |
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Legal Form : |
Limited Liability Company |
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Line of Business : |
Operators of ore mining and ore processing factory. |
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No. of Employees : |
5,768 |
RATING & COMMENTS
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MIRA’s Rating : |
B |
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RATING |
STATUS |
PROPOSED CREDIT LINE |
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26-40 |
B |
Capability to overcome financial difficulties seems comparatively
below average. |
Small |
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Status : |
Moderate |
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Payment Behaviour : |
No complaints |
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Litigation : |
Clear |
NOTES :
Any query related to this report can be made
on e-mail : infodept@mirainform.com
while quoting report number, name and date.
ECGC Country Risk Classification List – March 31, 2014
|
Country Name |
Previous Rating (31.12.2013) |
Current Rating (31.03.2014) |
|
Mongolia |
C1 |
C1 |
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Risk Category |
ECGC
Classification |
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Insignificant |
A1 |
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Low Risk |
A2 |
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Moderately Low Risk |
B1 |
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Moderate Risk |
B2 |
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Moderately High Risk |
C1 |
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High Risk |
C2 |
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Very High Risk |
D |
MONGOLIA - ECONOMIC OVERVIEW
Mongolia's extensive mineral
deposits and attendant growth in mining-sector activities have transformed
Mongolia's economy, which traditionally has been dependent on herding and
agriculture. Mongolia's copper, gold, coal, molybdenum, fluorspar, uranium, tin,
and tungsten deposits, among others, have attracted foreign direct investment.
Soviet assistance, at its height one-third of GDP, disappeared almost overnight
in 1990 and 1991 at the time of the dismantlement of the USSR. The following
decade saw Mongolia endure both deep recession, because of political inaction
and natural disasters, as well as economic growth, because of reform-embracing,
free-market economics and extensive privatization of the formerly state-run
economy. The country opened a fledgling stock exchange in 1991. Mongolia joined
the World Trade Organization in 1997 and seeks to expand its participation in
regional economic and trade regimes. Growth averaged nearly 9% per year in
2004-08 largely because of high copper prices globally and new gold production.
By late 2008, Mongolia was hit hard by the global financial crisis. Slower
global economic growth hurt the country's exports, notably copper, and slashed
government revenues. As a result, Mongolia's real economy contracted 1.3% in
2009. In early 2009, the International Monetary Fund reached a $236 million
Stand-by Arrangement with Mongolia and the country has largely emerged from the
crisis with better regulations and closer supervision. The banking sector
strengthened but weaknesses remain. In October 2009, Mongolia passed
long-awaited legislation on an investment agreement to develop the Oyu Tolgoi
mine, considered to be among the world's largest untapped copper-gold deposits.
Mongolia's ongoing dispute with a foreign investor over Oyu Tolgoi, however,
has called into question the attractiveness of Mongolia as a destination for
foreign direct investment. Negotiations to develop the massive Tavan Tolgoi
coal field also have stalled. The economy has grown more than 10% per year
since 2010, largely on the strength of commodity exports to nearby countries
and high government spending domestically. Mongolia's economy, however, faces
near-term economic risks from the government's loose fiscal and monetary
policies, which are contributing to high inflation, and from uncertainties in
foreign demand for Mongolian exports. Trade with China represents more than
half of Mongolia's total external trade - China receives more than 90% of
Mongolia's exports and is Mongolia's largest supplier. Mongolia has relied on
Russia for energy supplies, leaving it vulnerable to price increases; in the
first 11 months of 2013, Mongolia purchased 76% of its gasoline and diesel fuel
and a substantial amount of electric power from Russia. A drop in foreign
direct investment and a decrease in Chinese demand for Mongolia's mineral
exports are putting pressure on Mongolia's balance of payments. Remittances
from Mongolians working abroad, particularly in South Korea, are significant.
|
Source
: CIA |
CO. NAME : ERDENET MINING
CORPORATION LLC (Correct)
ERDENET MINING
CORP LLC (Requested)
Street : Amariin Square 1, Bayan-Undur Soum
Town : Erdenet 213900
Province : Orkhon Aimag
Country : Mongolia
Telephone: (976 1352) 73793
/ 71501 / 73589 / 73501 / 73790 / Mobiles
(976 99) 351 469 (Ts. Davaatserem) / (976 99) 351 264
(Mr.
Altankhuyag) /
(976 99) 351 556 (Mrs. Nansalmaa) / (976
99) 351 612 / (976
95) 349 518 / (976 99) 351 891
(Erdenebileg
Tsumyasukh) / (976 99) 351 773 (Mr. Silimbat)
/ (976 96) 009
287 / (976 96) 009 296
Fax : (976
1352) 73002 / 23002 / 73686
E-Mail : info@erdenetmc.mn / office@erdenetmc.mn
Website : www.erdenetmc.mn
Shortform Name : EMC
Also Known As : Erdenet Mining Corporation LLC / Mongolian-Russian
Limited Liability Company Erdenet Enterprise /
Erdenet SP / Erdenet Mining Corp LLC
Name Position
1. Ts. Davaatserem
General Director
2. Roy Eger Vladimirovich
First Deputy of General Director
of Erdenet Mining LlC
3. Davaa Sanbu
Deputy General Director For
Production
4. Ulzi Ochekh
Chief Operations Officer
5. B. Zargalsaikhan Financial Director
6. Mr. Altankhuyag Chief
Financial Officer
7. Mr. Chuluunbataar Director of Representative Office
in Ulaanbaatar
8. Grigory Inokentyevich Semenov
Deputy Director of Representative
Office
in Ulaanbaatar
9. D. Munkhsaikhan
Director of Public Relation
10.Erdenebileg Tsumyasukh
Planning & Monitoring Manager
11.Mr. Silinbat
Project Manager
Total Employees : 5,768
No complaints have been heard regarding payments from local suppliers
or banks.
Subject is a Mongolian-Russian joint venture, 51% of shares are owned
by the State Property Committee of Mongolia (SPC) and 49% of
shares is owned by the Russian Technologies State Corporation.
We consider it is acceptable to deal with subject for LARGE amounts,
however in view of the lack of financial information we recommend international
suppliers exercise a degree of caution.
Trade risk assessment : Normal
It is normal accepted practice for international suppliers to
deal on secured terms with Mongolian importers.
NAME : TRADE AND DEVELOPMENT
BANK OF MONGOLIA
Branch : Juulnchny Gudamj 7
Town : Ulaanbaatar 210646
Telephone: (976 11) 312 362 / 331 133
Fax : (976 11) 325 449
Subject also has an account with :
Investment & Technological Innovation Bank
(Itibank of Mongolia)
Hudaldaany St 11
Ulaanbaatar 46
Telephone: (976 11) 323 849
Fax : (976 11) 310 407
Private companies in Mongolia are not required to publish or disclose balance sheets. Balance sheets are not available from other sources, and the subject interviewed declined to give any financial information, which the company regards as strictly confidential.
The following financial information is the latest available on the subject :
Sale of products : US DLRS 383,000,000 - 2005 - exact
: US DLRS 696,500,000 - 2006 - exact
: US DLRS 850,800,000 - 2007 - exact
: US DLRS 765,200,000 - 2008 – exact
: US DLRS 572,200,000 - 2009 - exact
: US DLRS 850,100,000 - 2010 – exact
: US DLRS 958,800,000 - 2011 – exact
Cost of products : US DLRS 566,400,000 - 2007 - exact
: US DLRS 756,900,000 - 2008 - exact
: US DLRS 436,900,000 - 2009 - exact
: US DLRS 698,900,000 - 2010 – exact
: US DLRS 619,100,000 - 2011 - exact
Pre-tax profit : US DLRS 199,300,000 - 2005 - exact
: US DLRS 318,500,000 - 2006 - exact
: US DLRS 263,200,000 - 2007 - exact
: US DLRS 39,500,000 - 2008 - exact
: US DLRS 115,800,000 - 2009 – exact
: US DLRS 114,900,000 - 2010 – exact
: US DLRS 318,500,000 - 2011 – exact
Financial year ends 31 December.
Date Started : 22 November 1973
History : Subject has its origins in a joint venture between Mongolian State and Soviet Union State which was established on 22 November 1973 with the following shareholding structure :
- Mintsvetmet USSR
- Ministry of Fuel, Energy and Geology of Mongolia.
It started its operation in 1978. Agreement was prolonged for another 12 years on 5 June 1991 with the following shareholding structure :
- State Bureau of Mines of Mongolia (51%)
- Zarubezhtsvetmet VO Ministry of Metallurgy of USSR (49%).
Since 1996, State Property Committee of Mongolia (SPC) replaced the State Bureau of Mines of Mongolia in shareholding structure from the Mongolian side.
On 1 July 2003, subject changed its name to Mongolo-Russian Limited Liability Company Erdenet Enterprise. By the President of Russia’s decree No. 1052 dated 10 July 2008; Russian stake was given to Rostekhnologii State Corporation of Russia.
C.R. No.: 9019008085
Tax No.: 2074192
Authorized Capital : TUGRIK 2,658,321,900
Paid-Up Capital : TUGRIK 2,658,321,900
Limited Liability Company with the following shareholders :
Percentage
1. State Property Committee of Mongolia (SPC) 51%
Government House IV
Chingeltei District
Ulaanbaatar
Telephone: (976 51) 263 538
Fax : (976 11) 312 798
Est.: 31 July 1996 (by decree No.: 117)
(government agency responsible for the administration of the
privatization process in Mongolia and management of state-owned
properties and Public Private Partnerships)
2. Russian Technologies State Corporation 49%
(Gosudarstvennaya Korporatsiya Rostehnologii)
Gogolevsky Boulevard 21
Moscow 119991
Russia
Telephone: (7 495) 287 2500
Fax : (7 495) 695 4594
E-Mail : media@rostechn.ru
Affiliated companies of Erdenet Mining Corporation LLC :
Associates
1. Mongolrostsvetmet LLC
Jukov Avenue, MRTSM Blgd
Bayanzurkh District
Ulaanbaatar 51
Telephone: (976 11) 458 072 / 458 521
Fax : (995 32) 458 380 / 458 401
General Director : Ochir Erdenee
Employees: 1,663
Est.: 24 February 1973
Tax No.: 2550466
Capital : TUGRIK 1,226,788,000
Shareholders :
- State Property Committee of Mongolia (SPC) - 51%
- Russian Technologies State Corporation - 49%
2. Erdmin Co Ltd
(address is as per heading)
The Company is involved in the following activities :
Operators of ore mining and ore processing factory.
Subject is one of the biggest Ore mining and Ore processing factory in Asia which processes 25 million tons of ore per year and producing over 530.0 thousand tons of copper concentrate and 3.0 thousand tons of molybdenum concentrates annually.
NACE Codes : 0710 / 0729
Production Capacity : 500,000 tonnes of concentrates per annum.
Technical and economic factors :
Unit of measure
2007 2008 2009 2010 2011
Mass thou.m3 18,780 18,430 15,400 16,370 17,150
Ore mining thou.ton 27,780 27,570 28,200 27,575 29,274
Ore processing thou.ton 25,600 25,640 25,920 26,060 26,100
Concentrate production
Cu ton 543,190 525,264 533,083 522,033 513,731
Mo ton 3,978.05 3,795 4,769 4,347.7 3,977.48
Amount of metal in
concentrate Cu ton 130,160 126,796 126,485 123,448 121,601
Mo ton 1,978.67 1,900 2,409 2,198.5 1,956.64
Subject established promising collaborations with leading mining
experts from the following :
- Phelps Dodge, Inc.;
- Outokumpu Oyj, Finland;
- Bateman Engineering Ltd., Australia;
- Pacific Ore Technology Ltd., Australia;
- Brook Hunt & Associates Ltd., UK;
- KDEngineering, USA;
- Samsung Corp., South Korea and the world's other mining leaders.
Imports from Russia, Germany, China and Japan.
Exports to China, Australia, Japan and South Korea.
Subject exported to Russia.
The Company has the following facilities :
Facilities including administrative offices, an open pit, an ore-dressing factory, a transport facility, a machinery repair plant and other production and auxiliary shops, as well as accommodation, amenities, production and auxiliary facilities located in Erdenet.
The main mineral deposit, extracted by the Corporation was the
Erdenetiin-Ovoo area which locates 400 kilometres northwest from
Ulaanbaatar, 180 kilometres east from Darkhan city, 60 kilometres
northern from Center of Bulgan aimag and 140 kilometres from Russian.
The Erdenet is connected with East-Siberian railway network via
Naushki station and to the Chinese railway network through Erlyan
(Chinese border).
Subject also has branch offices located in Ulaanbaatar, Moscow, Beijing and London (see 'Branch Offices' below).
1. Peace Avenue 14
Ulaanbaatar
Telephone: (976 11) 320 561 / 312 703
Fax : (976 11) 312 039
2. Miklukho-Maklata Street 34/71
117279 Moscow
Russia
Telephone: (7 499) 724 3852
Fax : (7 499) 724 3775
3. Suite 1512
Beijing Silver Tower
2# North' Rd
Dongsanhuan Street
Chaoyang District
Beijing 100027
China
Telephone: (86 10) 6410 6217
Fax : (86 10) 6410 6219
4. 10, 11 Sheldon Square
London W2 6DQ
UK
Telephone: (44 20) 7266 7857
Fax : (44 20) 7266 7857
You enquired on : ERDENET MINING CORPORATION. Please note that subject is also known by this name. Subject's correct registered name is as per heading.
Interviewed : Mr. Silinbat (Project Manager).
FOREIGN EXCHANGE RATES
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Currency |
Unit
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Indian Rupees |
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US Dollar |
1 |
Rs.60.19 |
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|
1 |
Rs.102.56 |
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Euro |
1 |
Rs.81.91 |
INFORMATION DETAILS
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Analysis Done by
: |
DIV |
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Report Prepared
by : |
NNA |
RATING EXPLANATIONS
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RATING |
STATUS |
PROPOSED CREDIT LINE |
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>86 |
Aaa |
Possesses an extremely sound financial base with the strongest
capability for timely payment of interest and principal sums |
Unlimited |
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71-85 |
Aa |
Possesses adequate working capital. No caution needed for credit transaction.
It has above average (strong) capability for payment of interest and
principal sums |
Large |
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56-70 |
A |
Financial & operational base are regarded healthy. General unfavourable
factors will not cause fatal effect. Satisfactory capability for payment of
interest and principal sums |
Fairly Large |
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41-55 |
Ba |
Overall operation is considered normal. Capable to meet normal
commitments. |
Satisfactory |
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26-40 |
B |
Capability to
overcome financial difficulties seems comparatively below average. |
Small |
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11-25 |
Ca |
Adverse factors are apparent. Repayment of interest and principal sums
in default or expected to be in default upon maturity |
Limited with full
security |
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<10 |
C |
Absolute credit risk exists. Caution needed to be exercised |
Credit not
recommended |
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-- |
NB |
New Business |
-- |
This score serves as a reference to assess SC’s
credit risk and to set the amount of credit to be extended. It is calculated
from a composite of weighted scores obtained from each of the major sections of
this report. The assessed factors and their relative weights (as indicated
through %) are as follows:
Financial
condition (40%) Ownership
background (20%) Payment
record (10%)
Credit history
(10%) Market trend (10%) Operational size
(10%)
This report is issued at your request without any
risk and responsibility on the part of MIRA INFORM PRIVATE LIMITED (MIPL)
or its officials.