The Export-Import Bank of the United States will help finance the continued development of the Oyu Tolgoi mine in southern Mongolia, with a $500 million direct loan to its owners Turquoise Hill Resources and Erdenes Oyu Tolgoi LLC.
The bank says the loan will also secure about 2000 jobs across several US states and help to realize a 30% contribution to the Mongolian GDP.
“This transaction will not only support good jobs and bolster our economy in America, it will also provide a lift to the Mongolian economy and directly impact the country’s GDP,” says Ex-Im Bank chairman Fred P Hochberg.
“By using American-made products in this large project, the financing will support thousands of US jobs in states like Arizona, Colorado, Illinois, New York, and Texas. This transaction is even more proof of the value of exports in continuing to help the US economy grow.”
Oyu Tolgoi mine is in the South Gobi region about 550km south of the capital Ulaanbaatar, is an open-pit and underground copper mine that will produce concentrate containing copper, gold and silver. Once developed, the mine will rank as one of the largest copper mines in the world and will also rank as one of the most important capital projects in Mongolia.
The mine is operated by Oyu Tolgoi LLC, which is jointly owned by Canada’s Turquoise Hill Resources and Erdenes Oyu Tolgoi LLC of Mongolia. Global mining company Rio Tinto holds a majority stake in Turquoise Hill.
The project has been planned to minimize impacts on local residents and the environment in compliance with Ex-Im Bank’s strict Environmental Procedures and Guidelines as well as Mongolian law.
One small US business that will benefit from the project is CC Solutions LLC, a Yonkers, NY-based company that is a specialist in export credit agency administration. The company’s proprietary software, MTS, has processed nearly $1 billion in Ex-Im Bank disbursements across the world.
“The financing of this and other projects by Ex-Im Bank has allowed our company to provide high-value professional services, leading to permanent and partial employment for five people in the United States,” says CC Solutions’ principle Valerie Colville.
“The Mongolian economy will benefit tremendously from the development of Oyu Tolgoi. Significant mineral deposits will be recovered in a responsible and environmentally-sound manner, and the proceeds will be used for the human and social development of the people of Mongolia,” she says.
Ex-Im Bank is an independent federal agency that creates and maintains US jobs by filling gaps in private export financing at no cost to American taxpayers. In the past five years Ex-Im Bank has earned almost $1.6 billion above the cost of operations for US taxpayers. The bank provides a variety of financing mechanisms, including working capital guarantees, export-credit insurance and financing to help foreign buyers purchase US goods and services.