The Role of the Capital Market is Crucial in Mining Finance

Since its establishment in 2019, could you briefly introduce Khan Altai Resources’ development journey, main goals, and mission?

Khan Altai Resources LLC was founded in 2019 in western Mongolia with the vision of becoming a “leading national mining company that values responsible mining”. In 2020–2021, despite the challenges of the COVID-19 pandemic, the company successfully developed its project plan and road map completing construction within just 1.5 years and commencing production. As a national mining company, Khan Altai is guided by two core values: People and Nature. While extracting and processing valuable resources from the earth to create end products and contribute to the economy, we also strive to pursue people-centered management that prioritizes the well-being and development of our workforce.

How has Khan Altai’s financing strategy evolved through the different stages of the gold project, from exploration to development?

During the exploration stage, the project was fully financed by shareholders, leading to the discovery of the deposit and its registration with the Mineral Resources and Petroleum Authority. The development and construction stage was most challenging, given the global downturn and external shocks. At that time, we approached nearly every partner—banks, investors, and financial institutions—to keep the project moving. Despite difficulties, we overcame obstacles and successfully raised investment through a mix of internal resources, investors, banks, and securities companies.

What challenges does Mongolia face in attracting mining investment, and what should be reformed first?

Mining is the lifeblood of Mongolia’s economy, with the exploration and development of mineral deposits requiring substantial time and significant capital investment. Winning the confidence of foreign investors requires more than ambition—it calls for stability in laws, transparency in regulations, and the steadfast support of local communities. Today, major investors are hesitant to enter Mongolia mainly due to a lack of trust. To restore confidence, both the private sector and the government must responsibly fulfill their respective roles. We must agree upon clear and mutually beneficial rules of engagement in order to create a genuine ‘win–win’ environment.

How do you convey the risks and returns of mining projects to investors and build their confidence?

From the beginning, we were transparent about our capabilities and objectives. By funding the initial investment entirely with our own resources, we delivered tangible results and built confidence. The full risk taken by shareholders remains the strongest assurance, while the credibility of the management team provides the next layer of trust. Ultimately, what convinces investors most is our capability, competence, and reliability.

Khan Altai has opened up mining investment opportunities in the domestic capital market. In your view, what is the significance of the capital market in financing large-scale mining projects?

For the first time in Mongolia, we successfully raised the country’s largest M-OTC bond of its time in cooperation with Golomt Capital, Ard Securities, and Invescore Securities.

This is a very important issue. For the first time in Mongolia, we successfully raised the country’s largest M-OTC bond of its time in cooperation with Golomt Capital, Ard Securities, and Invescore Securities. Although there were few investors at the time due to the high risks of mining investment, the Khan Altai project managed to raise a total of MNT 50 billion from the capital market and was awarded “Best Securities Issuer” at the 2023 Grand Bull Awards. Previously, raising MNT 50 billion would have been extremely difficult, but now investor confidence has grown, financial literacy has improved, and participation has expanded. By utilizing domestic opportunities rather than relying solely on foreign sources, we can support the economy, create jobs, strengthen national producers, and make a valuable contribution to the country’s development.

What are the key differences between foreign and local investors? What experiences have you gained from working with international institutions?

Local investors primarily focus on profit margins, risk-free conditions, and guarantees, whereas foreign institutions place greater emphasis on environmental, social, and safety standards. After three years of engagement with the EBRD since 2021, we successfully secured financing for a 6.3 km conveyor project designed to reduce costs and promote green and responsible mining. The fact that it took a full year to finalize the contract demonstrated how demanding it is to meet foreign requirements. The EBRD recognized this project as environmentally friendly technology and awarded a grant, which remains a source of pride for us. In addition, we obtained ISO 9001, 14001, and 45001 certifications through an Australian organization, making our company fully compliant with foreign standards. Today, the Khan Altai project is developing into a world-class mining operation in western Mongolia, creating 1,200 jobs and contributing not only to provincial development but also to the national economy.

It is a pleasure to share this success with all our investors, and I would like to extend my deepest gratitude.