Heavy industry complex proposed at Sainshand

The Mongolian Government plans to establish a heavy industry complex in Sainshand, capital of Dornogobi province. The Ministry responsible for the sector believes that the project will play an important role in protecting raw material producers from the vagaries of price fluctuation, in manufacturing value added products, in creating new jobs, in improving locally available professional skills and qualifications, and in finding more extensive and varied use of both agricultural products and natural resources. Preliminary estimates expect the proposed heavy industry complex to raise GDP by USD12.5 billion and to create 396,000 new jobs.

The complex will serve national interests by strengthening the economic security of the country. It will be the foundation for the growth of heavy industry in Mongolia, and the creation of a large number of work places will contribute to individual household incomes. Enough wealth will be generated to enable political parties to fulfil their election promises to distribute among all Mongolian citizens the revenues accruing from the mining of mineral resources.

Sainshand turned out to be a natural choice for the location of the complex because it  already has railway connectivity, and for its proximity to fluorophosphates and brown and coking coal deposits to be used by the planned industries.

These are envisioned to include copper and iron smelters, coking coal and cement factories, power plants, and a railway terminal. Apartment complexes will come up and  road connections to Ulaanbaatar and other parts of Mongolia will be expanded. Ancillary light industry units will spring up, and there will be education, culture, science, trade and service centers to meet the evolving needs of people who will work in the complex.

The projected power plant will supply the energy requirements of the railway, helping lower transport costs. This in turn will lead to a drastic increase in export revenues and hard currency reserves.

The strategic deposits and other mineral resources of the Gobi region will be deployed to finance the project. They will be used to manufacture end products for both foreign and domestic markets and the income will be used to build new infrastructure and social network projects and to maintain them thereafter.

The State Great Hural (Parliament) will have to approve the project. Once this is received, work is expected to begin by the end of 2009 and finish by 2011. It will pass through several stages including feasibility study, environmental assessment, establishment of the legal framework, funding, commencement of construction, beginning of raw material export, and start of end-product output, a more complex operation.

The comprehensive project proposal will be drafted by the Ministry of Road, Transportation and Urban Development based on the Prime Minister’s Decree No.68 dated 8 July, 2009 about the financing of large projects in sectors under the ministry through marketing of mineral ores and products, about conducting economic and financial calculations and studies, and creation of a legal framework. Suggestions from other ministries will also be considered when drafting the project.

Please subscribe to our journal to read more.