Mongolian
During his visit to Darkhan-Uul province, Prime Minister L. Oyun-Erdene inspected the operations of the Darkhan Metallurgical Plant. Established in 1990 using iron ore deposits from the Darkhan-Seleng region, the plant saw the economic activation of the Tumurtolgoi iron ore deposit in 2010, leading to the establishment of an open-pit mine.
In 2014, QSC LLC entered into a concession agreement with the Ministry of Economy and Development for a mining and metallurgical complex project. However, on April 13, 2022, the government, through Resolution 148, canceled the agreement due to the company’s failure to meet its obligations.
The Darkhan Metallurgical Plant annually produces 100,000 tons of steel products and 2.5 million tons of iron ore concentrate, supplying both domestic and international markets.
However, during the implementation of the concession agreement for the mining and metallurgical complex construction, the production process faced disruptions. This was due to the concessionaires’ failure to maintain the plant’s technology and machinery, as well as discontinuing the procurement of spare parts and inventory.
Following a government decision, the plant was returned to state ownership and underwent management reforms. G. Dugarjav, the executive director of the Darkhan Metallurgical Plant, reported a loss of 9.6 billion MNT in April 2022 but achieved a net profit of 17.3 billion MNT in 2023. In the same year, the plant contributed 15.2 billion MNT to the state budget and 13 billion MNT to the Darkhan-Uul Province budget.
Prime Minister L. Oyun-Erdene has directed the Minister of Finance to address the damages incurred by the plant due to QSC. He underscored the significance of the Darkhan Metallurgical Plant becoming the cornerstone of steel production in the nation. Additionally, he has instructed relevant officials to enhance the plant’s capacity to meet domestic market demands.
There is a plan to construct a steel processing complex centered around the Darkhan Metallurgical Plant in three phases, with the goal of having it operational by 2027. Based on an analysis of the demand and supply of steel products, Mongolia’s annual demand in 2023 stands at approximately 500-600 thousand tons, with projections indicating that this figure will surpass one million tons by 2027.
