RE:RE:TRQ and SGQ Mongolian based companies
What do we know
exactly and for sure about what RIO has provided to the OT board and GOM representatives?
Other than GOM or GOM's rep, did anybody say anything like this?
:)
For months, we have heard of costs overruns from GOM's side p
utting the blame on RIO.
And then, there is this interview which offeres a nuanced picture:
https://uclalum.blogspot.hk/
where A.Munkhbat said that
"There are also Mongolian influences in Oyu Tolgoi cost increase"
On the feasibility study if we look at the financing part,
it is not too difficult to look at
GOM's responsibility for numbers that may be less attractive now.
One just has to look at the increased credit spread on Chinggis Bond I to understand that there is now a
higher perceived sovereign risk involved which de facto may impacts the funding cost of Phase II for OT or TRQ
as well as
potential issues for the enforceability of the guarantees/collateral/contract plain and simple.
If the financing cost of Phase II is higher,
then it impacts the profitability for the shareholders of OT, GOM and TRQ.
Then one may understand why GOM would hope/wish/dream that RIO will finance 1
00% on its OWN (funds raised by RIO at a cheaper rate then lent back to TRQ-OT at the same rate) in spite of GOM's actions undermining its own credit and sovereign bonds.
Shareholders of RIO are unlikely to offer to GOM the benefits of RIO cheaper funding costs especially after what has been happening over the last years and is still going.
That is another unintended consequence for GOM of their actions back firing here.
So I would be careful taking any of GOM's comment for face value.