Summary of proposed guarantee
Summaries of proposed guarantees are provided prior to Board consideration and before final contract signing, and they are therefore subject to change. Project briefs are disclosed after Board consideration and contract signing and reflect the terms of the project at the time of contract signature. Environmental and Social Review Summaries are provided for projects assigned an Environmental Assessment Category of A or B.
- Project name
- Oyu Tolgoi LLC
- Project ID
- Fiscal year
- Guarantee holder
Standard Chartered Bank
- Investor country
- Host country
- Environmental category
- Date SPG disclosed
- August 23, 2012
- Projected Board date
- November 08, 2012
- Gross exposure
- $1,000.0 million
- Project type
- Strategic priority area
- Environmental and Social Review Summary for Oyu Tolgoi LLC in Mongolia
This summary covers an investment by Standard Chartered Bank, for itself and as agent for a consortium of lenders yet to be identified, for the Oyu Tolgoi mining project in Mongolia. Standard Chartered Bank has applied for a MIGA guarantee (exact amount of coverage to be determined) for a period of up to 15 years against the risks of expropriation, war and civil disturbance, and breach of contract.
Update: On February 28th, 2013, MIGA's Board of Directors approved MIGA's proposed support for this project.
Oyu Tolgoi LLC is located in Mongolia’s South Gobi region. The project involves the development of one of the world’s largest copper deposits. The project is being developed by Rio Tinto, an international mining company. The project enterprise has been granted a 30-year mining license (with the possibility of extensions) that includes the right to explore, develop mining infrastructure and facilities, and conduct mining operations on the project. The government of Mongolia has also entered into an investment agreement with the project sponsor, Turquoise Hill Resources (formerly Ivanhoe Mines Ltd), the Project company, Oyu Tolgoi LLC (formerly Ivanhoe Mines Mongolia Inc LLC) and Rio Tinto.
The project is a category A under MIGA’s Policy on Social and Environmental Sustainability. Click here to view the Environmental and Social Review Summary prepared by the International Finance Corporation for their investment in the project. MIGA intends to present the project to the Board concurrently with the IFC.
The development of the mining sector will bring significant benefits for the people of Mongolia and economic development. Key benefits include job generation through indirect and direct employment; revenue through taxation, royalties, and dividends; a demonstration effect for further investment in the mining sector; and the development of supporting infrastructure.
The proposed project is aligned with the World Bank Group’s Country Partnership strategy for Mongolia and with MIGA’s strategic priorities of supporting investments in complex infrastructure projects and into countries eligible for assistance from the International Development Association.
To read more about the project, the development benefits, and the World Bank Group's role, click here.