Ts. Batbold: Building a new production plant that will substitute imports

Mongolian Economy Magazine spoke with Ts. Batbold, CEO of Erdenes Steel LLC, about the coke and steel plant project.

-Could you tell our readers about the coke and steel plant project?
-Erdenes Steel LLC is working on the implementation of the coke and steel plant project that will produce 500,000 tons of metallurgical coke and 300,000 tons of steel in a year. After conducting a study on the possible locations, we narrowed it down to Govisumber Aimag. The plant will not only create 1,500 jobs but it will also foster the creation and development of small and medium-sized manufacturers in the region.

-Would you mind introducing the latest progress to the project implementation?
-The studies on the coke and steel plant began in 2015. Subsequently, we completed the economic and technical feasibility study which was later approved by the authorities in 2019. I am honored to say that Erdenes Steel LLC has moved to the construction stage.

One of the top ten Asian companies SinoSteel Corporation which is a state-owned enterprise was selected as a general contractor for the coke and steel plant construction. Thereby, SinoSteel Corporation signed a memorandum of understanding with Erdenes Steel LLC. Within this framework, we held several business meetings to report the progress of the coke and steel plant project.

-One of the important factors for the successful implementation of any large-scale projects is an investment. How the company intends to secure the necessary investments?
-The project requires total investments of around 320 million USD. To explore investment opportunities, we have met with representatives of the French multinational financial services firm Natisix and the Swiss investment firm Credit Suisse. These firms have expressed their interest in investing in the coke and steel plant project.

-When will the project be completed? What are the potential risks you may incur along the way?
-Erdenes Steel LLC is working intensively to complete the project by 2025. In terms of risks, I would say there is a wide range of risks related to investment, funding, energy supply and construction.

-How will the project contribute to the Mongolian society and economy?
-The coke and steel plant carries significant importance for Mongolia as it could replace the imports, create 1,500 jobs, boost the household income, become one of the largest taxpayers and accelerate the development of rural regions. What is more, the plant could bring small and medium-sized producers into life.

– How are you planning to ensure the supply of raw materials?
-The raw materials involved in steel production are iron ore, iron concentrate, coke agglomerate, metallurgical coke, limestone and fluorite. The coking coal can be supplied from the Tavan Tolgoi Deposit and iron ore from ore deposits in Khentii, Dornogovi and Selenge aimags. These deposits are located near the railway and roads which will allow us to save costs. I would confidently say that turning the raw materials into final coke and steel products will play a critical role in the development of Mongolia.