China Eximbank provides RMB 200 million loan for Tumurtei Iron Mine Construction Project

China Eximbank provides RMB 200 million loan for Tumurtei Iron Mine Construction Project On June 19, 2002, BLT LLC (“BLT”) and Qinhuangdaoshi Qinlong International Industrial Co. Ltd. (“Qinlong”) concluded a joint venture agreement to establish Tumurtei Khuder LLC (“Tumurtei Khuder”).

Tumurtei Khuder was then incorporated on July 26, 2002, with BLT holding a 30 percent ownership stake and Qinlong holding the remaining 70 percent ownership stake.

Between 2002 and 2004 BLT, Qinlong, and Tumurtei Khuder carried out a limited number of activities with respect to the deposit. On October 11, 2002, Tumurtei Khuder was issued a license for road construction.

Then, on October 14, 2002, the Governor of Selenge aimag issued BLT with land rights for the area of the Tumurtei deposit. Then, on March 20, 2003, Tumurtei Khuder concluded a contract with China Qinhuangdao Mingcheng Engineering Co. Ltd for the construction of a road to the Tumurtei deposit. At some point in 2003, Tumurtei Khuder also prepared a Detailed Environmental Impact Assessment Report.

On January 28, 2004, Qinlong entered into a contract with Huihua International Trading Co., Ltd for the purchase of mining equipment. Then, on April 30, 2004, Tumurtei Khuder entered into a series of fuel supply agreements.

On October 5, 2004, the Governor of Yuruu soum granted Tumurtei Khuder the right to use conventional minerals for road construction. The mine began operations on September 23, 2010.

On May 24, 2005, Tumurtei Khuder — a special purpose vehicle and joint venture of Qinlong (29% equity stake), BLT (30% equity stake), Beijing Shougang (30% equity stake), and China Heilongjiang (11% equity stake)— and the Export-Import Bank of China signed an RMB 200 million loan agreement for the Tumurtei Iron Mine Construction Project (with the consent of the Government of Mongolia).

On the same day, the Chinese Government and the Government of Mongolia signed a Memorandum of Understanding (MOU) on the provision of a concessional loan.

Then, on October 5, 2005, Qinlong entered into a contract with Qinhuangdao Engineering and Research Institute for Metallurgical Industry MMIT to prepare a preliminary design for the Tumurtei Iron Mine Construction Project. Then, on December 16, 2005, Tumurtei Khuder applied for a blasting permit.

In December 2005, the Chairman of Production, Infrastructure, and Environmental Policy Coordination Department of the Administrative Office of Selenge granted Tumurtei Khuder permission to mine the Tumurtei deposit. Then, in 2006, Tumurtei Khuder concluded a number of agreements related to the operation of the mine.

On January 2, 2006, Tumurtei Khuder concluded a cooperation agreement with Khustai Yuruu LLC.

On March 22, 2006, Tumurtei Khuder concluded a contract for the Purchase of Explosives and Blasting Agents with Ilch Tulsh LLC. On April 17, 2006, Tumurtei Khuder concluded a contract to Provide Security Services with Khar Luu LLC. On April 28, 2006, Tumurtei Khuder concluded an Insurance Policy Agreement with Mongolian Insurance Group Co.

On May 9, 2006, Tumurtei Khuder concluded a Contract to Sell and Purchase Explosives and Detonators with Blast LLC. On May 29, 2006, Tumurtei Khuder concluded a contract to Prepare an Environmental Impact Assessment with Eco Natur LLC.

On June 2, 2006, Tumurtei Khuder concluded a contract to Construct, Repair and Maintain the Road from Dulaankhan to the Tumurtei Deposit with Mongolian Highway Co., Ltd.

On June 5, 2006, Tumurtei Khuder concluded a contract on the Recovery of the Costs and Expenses of Exploration Programs Financed out of the State Budget with the Mineral Resources and Petroleum Authority.

Then, in October 2006, Tumurtei Khuder’s mining license (“939A License”) was revoked after the Mongolian Government concluded that the license belonged to the state-owned enterprise Darkhan Metallurgical Plant.

However, prior to the revocation of the 939A License, Tumurtei Khuder had mined 461.1 thousand tons of iron ore to make 322.7 thousand tons of processed iron ore, 180 thousand tons of which it had exported, Tumurtei Khuder also had plans in 2006 to expand its investment activities by building further processing facilities that would include a beneficiation plant (meaning in this context a plant for the electro-magnetic separation of the iron ore), an agglomeration workshop and potentially a reduced-iron plant or a steel-smelting plant.

On February 12, 2010, Qinlong, Beijing Shougang and China Heilongjiang filed a suit against the Government of Mongolia at the Permanent Court of Arbitration at The Hague for revoking Tumurtei Khuder’s license at the Tumurtei iron ore mine in Khuder soum of Selenge Province. On June 30, 2017, the arbitral tribunal dismissed the claimants’ request in full.

Then, on September 28, 2017, Qinlong, Beijing Shougang and China Heilongjiang appealed to a New York federal court to revive their claim against Mongolia over the revocation of an iron ore mining license at Tumurtei mine.