Erdenes Tavan Tolgoi seeks dual listing on SEHK


2018-03-07 09:15 GMT+8

At the orders of the Government and Erdenes Mongol LLC, parent company of ETT, the board of Erdenes Tavan Tolgoi (ETT) has decided to register the shareholders of 1072 shares distributed to every citizen of Mongolia last week. Sumiyabazar Dolgorsuren, the Minister of Mining and Heavy Industry, previously revealed that he has already provided guidance and directive to the relevant agencies to study the possibilities of listing Erdenes Tavan Tolgoi (ETT) on the Hong Kong Stock Exchange (SEHK) in 2018. The minister believes dual listing is possible and that ETT shares can be traded on both the Mongolian Stock Exchange and Hong Kong Stock Exchange.

At an irregular meeting of the cabinet held on February 23, Sumiyabazar Dolgorsuren, Minister of Mining and Heavy Industry briefed the cabinet on the issues of establishing a sovereign wealth fund and listing of ETT on two stock exchanges. Currently, the ETT shareholding structure is composed of the Government of Mongolia and Mongolian public who own 85 percent and 15 percent of the total outstanding shares of ETT, respectively.

According to the Mineral Resources and Petroleum Authority of Mongolia, there are 9 companies operating in the deposits of strategic importance as set by the Parliament. Tavan Tolgoi, one of the world’s largest high-quality coal deposit sites, is expected to yield over six billion tonnes of resources, of which, a quarter is estimated to be coking coal.

MarketIntel assess the attempt to have positive impact

The government intended to sell shares of ETT on the stock exchange both locally and internationally; however, the long-awaited IPO was postponed several times in past years due to weaker coal prices, poor market conditions, and uncertainty over the legal environment in Mongolia.

According to MarketIntel, 80 percent of the total outstanding shares of ETT are already owned by the government of Mongolia and Mongolian citizens. Of those 80 percent of shares, 0.05 percent shares are owned by Mongolian business entities, 14.75 percent and 65.2 percent shares are owned by Mongolian citizens and the government of Mongolia. Whereas, 20 percent of the total outstanding shares of ETT are available to be listed on local and international stock exchanges. Whether ETT is successfully listed on stock exchanges locally and internationally within 2018, the attempt itself will have a significant positive impact on local capital markets and on the coal industry. If the matter is pushed to the following year, it will come too close to the next parliamentary election and may become a highly politicized subject.


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