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Report No. : |
341894 |
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Report Date : |
29.09.2015 |
IDENTIFICATION DETAILS
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Name : |
ERDENES OYU TOLGOI LLC |
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Registered Office : |
Express Tower, 14th Floor, Offices No. 1403 & 1404, Peace Avenue 4, Chingeltei District, 1st Khoroo, Ulaanbaatar 15160 |
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Country : |
Mongolia |
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Date of Incorporation : |
08.06.2011 |
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Legal Form : |
Limited Liability Company |
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Line of Business : |
Company is involved in the following
activities : Participates in operations of “Oyu Tolgoi
LLC” in order to utilize state participation during the mine production. |
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No. of Employees : |
50 Plus |
RATING & COMMENTS
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MIRA’s Rating : |
Ba |
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RATING |
STATUS |
PROPOSED CREDIT LINE |
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41-55 |
Ba |
Overall operation is considered normal. Capable to meet normal
commitments. |
Satisfactory |
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Status : |
Satisfactory |
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Payment Behaviour : |
Slow but correct |
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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, 2015
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Country Name |
Previous Rating (31.12.2014) |
Current Rating (31.03.2015) |
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Mongolia |
B2 |
B2 |
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Risk Category |
ECGC
Classification |
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Insignificant |
A1 |
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Low |
A2 |
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Moderate |
B1 |
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High |
B2 |
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Very High |
C1 |
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Restricted |
C2 |
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Off-credit |
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 (FDI). 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 strong economic growth because of market reforms 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 emerged from the crisis with a stronger banking sector
and needed reforms to the government’s fiscal management. In October 2009,
Mongolia passed long-awaited legislation on an investment agreement to develop
the Oyu Tolgoi (OT) mine, considered to be among the world's largest untapped
copper-gold deposits. However, Mongolia's ongoing dispute with foreign investors
developing Oyu Tolgoi has called into question the attractiveness of Mongolia
as a destination for foreign investment. This caused a loss of investor
confidence, a severe drop in FDI, and a slowing economy, leading to the
dismissal of Prime Minister ALTANKHUYAG in November. The new government has
made restoring investor trust and reviving the economy its top priority, but it
will be challenged to unwind the monetary and fiscal stimulus programs in use
since 2013 to counteract the fall in foreign investment. In December 2014 the
government awarded a deal to develop the massive Tavan Tolgoi (TT) coal field
to a consortium comprising Energy Resources/MCS (Mongolia), Shenhua (China),
and Sumitomo (Japan); talks continue to hammer out the financing and the
operating details. The economy grew more than 10% per year since 2010, largely
on the strength of commodity exports to nearby countries and high government
spending domestically, before slowing to 7.8% in 2014. Mongolia's economy 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 nearly 62% of
Mongolia's total external trade - China receives some 90% of Mongolia's exports
and supplies Mongolia with more than one-third of its imports. Mongolia has
relied on Russia for energy supplies, leaving it vulnerable to price increases;
in 2014, Mongolia purchased nearly 90% of its gasoline and diesel fuel from
Russia. A drop in FDI has put pressure on Mongolia's external finances.
Remittances from Mongolians working abroad, particularly in South Korea, are
significant.
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Source
: CIA |
CO. NAME : Erdenes Oyu Tolgoi LLC
Building :
Express Tower, 14th Floor, Offices No. 1403 & 1404
Street :
Peace Avenue 4
Area :
Chingeltei District, 1st Khoroo
Town :
Ulaanbaatar 15160
Country :
Mongolia
Telephone :
(976 70) 078 085 / Mobiles (976 91) 911 053 / (976 91) 911 037
Fax :
(976 70) 078 085
E-Mail :
info@eot.mn
Website :
www.eot.mn
Shortform Name : EOT
Also Known As : Erdenes Oyu Tolgoi Co. Ltd / Erdenes Oyu Tolgoi XXK
Name Position
1. Byambasaikhan Bayanjargal Chief
Executive Officer
2. Tselmeg Sosorbaram Managing Director
3. O. Sainbayan Executive Director
4. Otgochuluu Chuluuntseren General Economist, Director of Executive’s Office
5. Ariunbold Byamba Senior Managing Director
Total Employees : 50 plus
No complaints have been heard
regarding payments from local suppliers or banks.
Subject is a state owned company and a
subsidiary of Erdenes Mongol LLC which is a leading national company in
Mongolia’s key economic sectors, including mining, infrastructure, energy and
industry.
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.
Although it is normal accepted practice for international suppliers to deal on
secured terms with Mongolian importers.
Trade risk assessment : Normal
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
State owned 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
applies to Oyu Tolgoi LLC, subject’s affiliated company :
Sales Turnover :
US DLRS 1,644,100,000 - 2014 - exact
Net Profit :
not given
Financial year ends 31 December.
The following financial information
applies to Erdenet Mining Corporation LLC, subject’s affiliated company (latest
available) :
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 : 8 June 2011
History : Subject was established in
Ulaanbaatar on 8 June 2011.
Tax Card No. : 5548721
Capital : not given
Limited Liability Company with the
following directors and sole shareholder :
Directors
1. Ts. Nanzaddorj
(Mongolian national)
2. D. Artag
(Mongolian national)
3. E. Batbayar
(Mongolian national)
4. J. Baterdene
(Mongolian national)
5. R. Erdeneburen
(Mongolian national)
6. H. Gantsogt
(Mongolian national)
7. B. Javkhlan
(Mongolian national)
8. D. Munkherdene
(Mongolian national)
9. Z. Narantuya
(Mongolian national)
Shareholder
Erdenes Mongol LLC 100%
6 Jigjidjav Street
1 Khoroo, Chingeltei District
Ulaanbaatar 15160
Telephone: (976 70) 110 735
E-Mail : emgl@erdenesmongol.mn
Website : www.erdenesmongol.mn
(Owned by Government of Mongolia)
Affiliated companies of the Erdenes
Oyu Tolgoi LLC :
Subject’s is a subsidiary of Erdenes
Mongol LLC, which also includes the following companies :
1. Erdenet Mining Corporation
Friendship Square, Bayan-Undur soum
Orkhon province, 61027
Mongolia
Telephone: (976 1352) 73 501
Fax : (976 1352) 73 002
C.R. No. : 9019008085
Tax No. : 2074192
Capital : TUGRIK 2,658,321,900
2. Erdenes Tavan Tolgoi” JSC
Finance Center Jigjidjav-8,
1 Khoroo, Chingeltei District
Ulaanbaatar 151608
Mongolia
Telephone: (976 70) 118 585
Fax : (976 70) 119 595
3. Baganuur JSC
Baganuur District
Telephone: (976 70) 210 114 / 213 739
Fax : (976 70) 213 130
4. Shinee Ovoo JSC
Bayanzurkh District, 18th Khoroo
Telephone: (976 11) 458 940
5. Oyu Tolgoi LLC
Monnis Tower
Chinggis Avenue 15
Sukhbaatar District
Ulaanbaatar - 14240
Telephone: (976 11) 331 880
Fax : (976 11) 331 890
C.R. No. : 9019006110
Tax Card No. : 2657457 (issue date : 1 July 2005)
Foreign Investors Certificate : 00-218
Shareholders :
- Oyu Tolgoi Netherlands B.V.
}
The Netherlands
}
(Subsidiary of Turquoise Hill
}
Resources Ltd 100%) } 66%
- THR Oyu Tolgoi Ltd }
British Virgin Islands
}
(Subsidiary of Turquoise Hill
}
Resources Ltd 100%) }
- Erdenes Oyu Tolgoi LLC 34%
Express Tower, 14th Floor,
Offices No. 1403 & 1404
Peace Avenue 4
Chingeltei District, 1st Khoroo
Ulaanbaatar 15160
Telephone: (976 70) 078 085
Tax Card No. : 5548721
The Company is involved in the
following activities :
Participates in operations of “Oyu
Tolgoi LLC” in order to utilize state participation during the mine production.
NACE Code : 7490
Subject neither imports nor exports.
The Company has the following
facilities :
Premises comprising administrative
offices located at the heading address.
BENEFITS TO MONGOLIA
FROM OYU TOLGOI PROJECT
- Total of around 7.8
trillion MNT will be invested as part of the project;
- As of today, approximately
900 billion MNT was paid to Government of Mongolia as a tax;
- In the last 18
months, worth of 4.5 trillion MNT was invested in Oyu Tolgoi project;
- 300 billion MNT was
paid as a prepaid tax to Government of Mongolia;
- Oyu Tolgoi project
is procuring 10.4 billion MNT worth of goods and services every day;
- In 2019 Mongolian
GDP will grow by 35%;
- In 2019 Mongolian
export will double, and the half of this will be generated by Oyu Tolgoi;
- In 2013 the
production of the mine will commence, 3,000 Mongolians will work there;
- About 1,000
Mongolian national suppliers are providing goods and services to Oyu Tolgoi
project;
- The biggest
training program in the history of Mongolia has been developed by Oyu Tolgoi
and 110 billion MNT worth of funding is being provided to this program;
- Government of
Mongolia will benefit the majority of the total profits of the project without
bearing any financial risks;
- According to the
estimates of the International Monetary Fund, Mongolia will benefit the 55% of
the total profits generated by Oyu Tolgoi project during life time of the
project as in a form of a tax, royalty, dividends.
Interviewed : Subject's employees.
FOREIGN EXCHANGE RATES
|
Currency |
Unit
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Indian Rupees |
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US Dollar |
1 |
Rs.66.08 |
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|
1 |
Rs.100.32 |
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Euro |
1 |
Rs.73.81 |
INFORMATION DETAILS
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Analysis Done by
: |
TRI |
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Report Prepared
by : |
NIT |
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 |
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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.