Erdenes MGL has taken control of the Ukhaa Khudag-Gashuun Sukhait paved
road from Gobi Road, a subsidiary of the Mongolian Mining Corporation,
on payment of an amount equivalent to approximately $90,323,295.42 at
the current exchange rate. The amount was determined by a working group
appointed by the Ministry of Economic Development. The road was
constructed under a Build-Operate-Transfer Agreement between Gobi Road
and the Ministry of Road, Transportation and Urban Development whereby
Gobi Road was granted a right to build, operate and maintain the road
for a period of ten years from the date of its commissioning.
The
road commenced operations in October 2011. Under the BOT Agreement,
Gobi Road was to transfer all rights and obligations with respect to the
operation and maintenance of the road to the Government for nil
consideration upon expiration of the agreement term. The Government had
the right to take it over upon payment of compensation at any time
before that. This has now happened. MMC will continue to have
unrestricted access to the road by paying for road utilisation and road
maintenance services.