Mongolia will press ahead with plans to list a state-owned mining company embroiled in a corruption scandal that sparked protests in the capital Ulaanbaatar and that a new owner could help drive out corruption, Mongolia's justice minister said.
State-owned Erdenes Tavan Tolgoi JSC (ETT) owns a large chunk of a massive 6-billion-tonne coking coal deposit near the Chinese border that is at the heart of Mongolia's more than a decade-long plan to develop its small mining-dependent economy.
But the development of Taban Tolgoi has been hampered by inaccessibility and disputes over how Mongolia's strategic asset should be funded and owned. Volatile global coal prices and cooling investor sentiment have also hampered TEPCO's previous efforts to list overseas.
Justice and Home Affairs Minister Nyambaatar Khishgee said: "The prime minister came up with an initiative to change the governance of (ETT) and quickly made it public." Thousands have gathered in recent days to protest government corruption.
"This is expected to put an end to transparency issues in the mining sector and corruption of government officials," he added.
A spokesman for ETT could not immediately be reached for comment.
Demonstrators clashed with police in the capital Ulaanbaatar last week. Recent allegations of so-called "coal theft" at the Taban Tolgoi coal mine have led many to the streets demanding action against the perpetrators.
Hundreds of protesters still gathered in Bangkok's central square on Tuesday, with some setting up traditional tents to stay overnight as temperatures plummeted to minus 30 degrees Celsius.
About 50% of Mongolia's export earnings come from coal, mostly mined by ETT. However, the government said in October that some 400,000 tonnes of coal produced by the company in recent years were missing. Previous allegations have shown that between 2011 and 2017, China exported nearly 1 million tonnes of coal without registering it.
All contracts signed by ETT are now public, Niambaatar said. Details of the owners of 25,000 trucks involved in transporting ETT coal were also revealed.
Authorities are also investigating 7,373 trucks that repeatedly transported coal to the Chinese border between 2013 and 2017 but appeared to arrive empty.
Mongolia also plans to appoint a senior international auditor to investigate ETT's finances, Nyambaatar said.
Nyambaatar said the government was working to ensure that exports from the project would not be affected by the investigation, while also avoiding checks on Chinese coal buyers. Chinese buyers account for about 85% of the company's coal sales.
“We are trying to reduce the risk as much as possible,” he said, adding that he had met China’s ambassador to Mongolia this week to assure him that trade would not be affected.
Mongolia has long been plagued by poor governance at state-owned mining companies, which are saddled with billions of dollars in debt. But from 2020 to 2021, the country's economy has been further hit by strict COVID-19 lockdown measures, which have driven up unemployment, as well as high energy costs due to the war in Ukraine.
"How can we leave our children in this ugly debt-ridden society?" said Gantulga Tumentogtokh, 42, who spent the night in the central square for the fifth day to keep warm.
“We should really issue (state-owned company) shares and develop Mongolia. If we had done this earlier, our lives would be different. I want to see accountability.”
However, some have questioned whether the government's efforts will be enough.
"Soaring prices and rising poverty are the cause of public anger," said economist Otgochuluchuluntseren, a former government official.
"In the short term, we need to reform the governance of state-owned enterprises. In the long term, the industry must thrive by creating more sustainable and decent jobs."