Mongolia Daily 2011 December 19 - Eurasia Capital

Mongolia Daily December 19, 2011POLITICS AND ECONOMYS&P Ratings Services Revised Mongolia Outlook to PositiveStandard & Poor’s Ratings Services revised the outlook on Mongolia to positives from stable onDecember 19. The ratings agency affirmed the ‘BB-‘ long-term and ‘B’ short-term sovereign ratings. Thetransfer and convertibility assessment (T&C) is ‘BB’.The agency said that the outlook revision reflects expectations of significant real per capita GDP growththrough to 2014 at least. The growth is underpinned by output and exports expansions in resourcessector. “The associated improvement in general government debt and external leverage position willreduce the vulnerability of the sovereign’s debt-servicing capacity,” – S&P credit analyst Agost Benardsaid. According to S&P, Mongolia has exceptionally strong growth outlook over the medium term. Theagency stated that it may raise the sovereign ratings of Mongolia “if fiscal and external debt metricscontinue to improve, of if improvements in fiscal, monetary, and banking sector policies materiallyreduce vulnerabilities in these areas.”S&P warned that the ratings may face downward pressure if fiscal profligacy or unexpected bankingsector losses threaten macroeconomic stability and public finances, or the country resorts to excessiveexternal commercial borrowing.Erdenes Tavan Tolgoi IPO May Be in April 2012, B. Enebish SaysIn an interview to Mining Journal on December 17, Erdenes Mongol CEO B. Enebish said that ErdenesTavan Tolgoi (ETT) IPO is expected in April, 2012. According to Mr. Enebish 10-20% of ETT will be listed inMongolia. Up to 30% of ETT is expected to be listed in Hong Kong and London with the governmentretaining majority stake in ETT through Erdenes Mongol asset holding company. Mongolian governmenthired Goldman Sachs, Deutsche Bank, BNP Paribas and Macquarie to facilitate IPO of the company.Mr. Enebish also said that mining operations at Tavan Tolgoi property were underway and they hadreceived US$250mn of advance payment, which were deposited to the Human Development Fund. ETTsigned US$250mn coal supply contract with Aluminum Corp. of China Ltd. (Chalco) and Jinan Iron &Steel Co. in July this year. Coal shipments to Chalco started in August, the company reported. The miningoperations are underway at East Tsankhi area of the Tavan Tolgoi field. ETT contracted BBM OpertaGroup and Macmahon Holdings to mine the area. ETT expects to develop West Tsankhi area incooperation with an international strategic partner.Dosbergen Musaevdosbergen.musaev@eurasiac.comwww.eurasiac.com 2