Ulaanbaatar /MONTSAME/. Speaker of the Parliament G.Zandanshatar visited and got acquainted with the operations of the Salkhit silver and gold deposit located in Gurvansaikhan soum of Dundgobi aimag yesterday, on May 3.

When he was serving as Chief of the Cabinet Secretariat of Government in 2018, Speaker G.Zandanshatar carried out the works to transfer the deposit under state ownership and put into economic circulation.

Erdenes Silver Resource LLC was established in 2019 as a subsidiary of Erdenes Mongol LLC in order to exercise state rights in strategically important silver and gold deposits of Mongolia, put it into economic circulation and to establish a silver refining plant and the mining license of the Salkhit deposit was transferred to the company.

The deposit covers a total area of 2,887.85 hectares and the first concentrate was processed when the open pit ore processing plant was fully operational. The plant, which operates 24 hours a day, four seasons a year, has the capacity to process 1,000 tons of ore per day and produce 30-40 tons of concentrate. One ton of concentrate contains about one kilogram of silver, three grams of gold, and more than one kilogram of copper and zinc. The concentrator consists of five main parts and processes the ore by flotation.

Water supply is provided by 4 deep wells at a distance of 2000-3500 meters from the mining area, and 3 reserve reservoirs have been established to ensure the reliable operation of the plant. The concentrator produces dry waste. Based on environmentally friendly technology, 85 percent of the water used is reused.

B.Jargalsaikhan, Deputy Director for Mining, said, “Currently, about 220 people work at our deposit. It is possible to increase the number of jobs to 350 in the future. Training is being provided to provide jobs for local people. The average salary of employees is about MNT 2 million. We work with more than 40 job-related companies, of which about 15 are part-time contractors. It is estimated that it is improving the livelihoods of more than 1,000 households.”

In December, 2019, Erdenes Mongol LLC and Erdenes Silver Resource LLC established an agreement with the Bank of Mongolia to cooperate in selling and purchasing precious metals and handed the first sample of refined silver, extracted from Salkhit silver deposit, to the State Fund of Treasury. Within the five-year agreement, ‘Erdenes Silver Resource’ LLC is to supply fine silver bars with not less than 850-980 percent purity and receive the amount of payment as stated in the agreement.

CEO of Erdenes Silver Resource LLC T.Munkhbayar said, “When the deposit was first taken over by the state, it was like a ruin. At present, 80 percent of the plant has been renovated and fully automated by Mongolian engineers within 30 days. Some of the equipment was made by themselves and increased the capacity. We have fulfilled our promise to start full operation on May 1. The first concentrate of the plant has been produced. The work is underway to leave wealth for our future generations. I would like to thank the President of Mongolia, Speaker of the Parliament, Prime Minister, Minister of Mining and Heavy Industry, the executives of the Erdenes Mongol LLC, and all our engineers and technicians for their support. It can be understood that the State Fund of Treasury has been set in motion with the Salkhit deposit.

According to the plan, we have a task to pay off pension-backed loan of MNT 1.2 trillion in a period of five years. Previous feasibility and resource studies have identified the reserves on the two-thirds of the Salkhit silver and gold deposit. According to the study, the deposit has reserves of 808.3 tons of silver and 1117.1 tons of gold. It has been determined that these resources can be doubled or tripled by intensifying exploration work. The information will be made public in a timely manner.”

Parliament Speaker Zandanshatar said, “It took a long time to transfer this deposit under state ownership. After more than a year of on-site operations, it was transferred to state ownership under the public control. The deposit has set the standard for the use of resources with direct benefits to the people. It is of great importance for the livelihood of citizens, the national economy and regional development. A total of MNT 770 billion has been spent for the one-time forgiveness of the pension-backed loans of about 228 thousand elderly people in accordance with the principle of distributing the benefits of wealth to the people. It is a clear example of new construction work that is working hard and efficiently during the crisis.

The plant neither receives any funding from the state budget nor use bank resources as collateral, only operate the deposit with its own resources and develop and produce. Putting this deposit into economic circulation will increase Mongolia's gold and silver reserves. Many people are getting employed. By setting a good example for the people and the country, we have the opportunity to use our deposits beneficially in the future through state and private partnerships.

It is also in line with the amendment to the Constitution of Mongolia, which states that "Mongolia shall establish a legal basis for the development of strategically important mineral deposits in accordance with the principle of natural resource ownership by the people of Mongolia and the majority of its benefits belong to the people" and he thanked all the staff for their effective and diligent work in a short period of time and wished them success in their work.

During the visit, the plant staff handed over the first sample of silver concentrate produced by Mongolian engineers based on their own technology to Speaker G.Zandanshatar and the second to the first owner of the deposit Sh.Mungunshagai.

Sh.Mungunshagai, “It is good to see that the work that had been stalled for three years is starting. Mongolia is rich in resources and has many fruitful mines and deposits. There have never been mines that have benefited directly to the people. This deposit is the first. If it becomes a 'model' deposit in the future, people will enjoy the benefits from it. It would have been very difficult if the elderly had been in debts during this crisis. I am grateful to the Speaker of the Parliament and the Government for their support. Moreover, I am honored that I had took part in this work” reported the Media and Public Relations Department of the Parliament.

Published Date:2020-05-05