Sending you wishes for good health and prosperity, I hope this letter reaches you in high spirits.
I am currently undergoing medical treatment. As a person who has consistently endeavored to
contribute positively to his country and holds a firm belief in its promising future, I am appealing
to you in my quest for justice.

Undue intimidation and harassment

Several days ago, a squad from a law enforcement agency suddenly raided and searched the
offices of companies associated with me. The same operation was previously carried out in
2019. The reasoning and pattern of the current investigation seem strikingly familiar, seemingly
motivated not by the stated economic crime prevention, but rather by political agenda, personal
interests, and a combination of both. I view this as an undue act of intimidation by a government
organization towards our employees and companies that have their financial statements
annually audited and assured by both national tax authority and international professional audit
firms.

Hunt for a phantom

I understand that the objective of this investigation is to find any association of former President
Mr. Elbegdorj Tsakhia’s involvement with Achit Ikht company. The investigation, that was carried
out 5 years ago, has already proven that there was no involvement of Ts. Elbegdorj with the
company.
I deeply regret Prime Minister’s address at a parliamentary session last Friday, where he
disseminated completely false information without any rationale and evidence. If such
slanderous and inaccurate information was conveyed to the Prime Minister by a staff member’s
oversight or lack of due diligence, it would be easy to forgive and the mistake could be rectified.
However, if that misinformation was intentionally relayed to the heads of Government, then
those responsible must face strict accountability.
I would like to highlight that in the past, there was another incident involving the fabrication of
false evidence to link Ts. Elbegdorj to our organization about which the members of the National
Security Council of Mongolia were made aware at the time. It cannot be ruled out that such
attempts are being repeated now. It is considered a heinous crime to falsely prosecute someone
based on absent or fake evidence.

Brief history

In early 2000’s when I was not employed, I met and collaborated with individuals from an
English company keen on revitalizing the off-balance dumps of the Erdenet mine. The person
who introduced us now serves as an ambassador. At that time, perhaps only God knew where
we would be working or how the price of copper would change in the years to follow. The first
agreement executed in English and Russian with the Erdenet Mining Corporation (EMC) on the
use of Dump No.2, as well as the provision of constructing a pilot plant, were the outcome this
process. The English, lamenting that they would not invest a single pound if future reserves
after the depletion of reserves in Dump No.2 are not agreed upon, left Mongolia and went on to
set up a similar plant in Kazakhstan, a company whose shares are traded on the London Stock
Exchange these days.
We didn’t steal, swindle, or loot the copper tailings dump of Erdenet mine. The agreement on
the use of Dump No. 2 was signed by the decision of EMC’s Council, then a Mongolian-Russian
joint venture, operating under an independent Articles of Incorporation as per the agreements
and treaties between the Mongolian People’s Republic and Soviet Union, and later between
Mongolia and Russian Federation. We assumed great risks, yet we fully fulfilled our obligations.
No one had faith in the success of our plant project. All refused to invest, including the
Development Bank of Mongolia and prominent businessmen.
In spite of this, we borrowed high-interest rate commercial loans, acquired funding with stringent
terms from an international trading company, invested additional capital to complete the plant for
60 million US dollars. This substantial investment ended up creating 300 new Mongolian jobs.
We ultimately succeeded in adopting the advanced, modern technology after going through
many challenges and difficulties. While we hired experts Australia, the USA, China, and Canada
by invitation in the initial four years, today the plant is proudly run by 100% national engineers,
technicians and operators. I am pleased that they reached the level of providing advisory
services to other international and domestic projects.
For years, we have collaborated well with EMC as its best partner. It is invariably third parties
who attempt to sow discord between us. With regards to the transfer of 34% ownership, we first
reached out in 2013 and again in writing in August 2014, immediately after the plant's trial
production, requesting EMC to appoint its delegates to the Board of Directors of Achit Ikht. But
our proposal was not accepted. EMC’s extensive working group tasked to study our project had
concluded that Achit Ikht as a “very bad” project with high operational, technological and
financial risks, which we learned about subsequently.
The head of the EMC working group assigned to negotiate an agreement with us was Mr. Igor V.
Roy, a Russian national and then the First Deputy Director of EMC joint venture. He said, “Why
are you offering one-third of the plant's shares? Owning shares implies that we would also bear
responsibility for repaying your loan, proportional to our share ownership. The price of copper is
currently trending downward on the world market, and I hope it doesn't plummet to the lows of
1998. We do not know the technology of your plant, which appears to be common in warmer
countries, and we were not involved in the selection of equipment. Joint projects and enterprises
by and with Erdenet bring losses, not profits. Even now, the molybdenum project is causing
headaches for us. Acid mine water coming out of Dump No.2 is killing animals, so we have
been incurring additional costs to fence and protect them. Now it is your responsibility to fence
and protect Dump No.2. Remember, managing a plant is vastly different from constructing one. I
wish your factory uninterrupted operation and success''. What else could we do at that point
except being disappointed by EMC’s lack of confidence in our stable operation?
After negotiations, we agreed to pay 2% of revenue from each product on a progressive basis
(separate from and additional to the taxes, royalty and fees we pay to state and local authority)
to EMC, irrespective of our company making profit or loss, thus signed a new contract in 2015.
Receiving a special payment without making any investments, or bearing any risk and cost,
must have been the idea of that Russian individual.
We have expressed our willingness to transfer 34% of our shares many times in writing and
conducted meetings. Unfortunately, despite EMC's capacity to make autonomous decisions
within the legal framework, its director redirects its authority to the State Property Agency or the
ministry, which they in turn pass to the Cabinet, and the Cabinet escalates it to the Parliament.
Essentially, it appears everyone was concerned about potential future blame. Complicating
matters further, leadership at these institutions get changed and new officials talk about entirely
different things from their predecessors, which is why the matter is unconcluded. Now, with the
law being finally passed, I hope that the implementation can take place.
Since freeing ourselves from the burden of debt, we have successfully executed numerous
projects across education, sports, environmental, and humanitarian sectors, including the
construction of the long-dreamed Steppe Arena, an indoor ice rink in the capital, the installation
of modern, fully-equipped laboratories in five schools in Erdenet, the planting of 3 million trees,
and running a foundation which provides assistance to children from 'ger' areas of Songino
Khairkhan district who lag in their educational programs.
In addition, we were preparing to go public as a publicly traded company, but unfortunately, we
were unable to do so due to the 2019 investigation and then in 2022 due to lack of sufficient
reserves.

Greed and revenge

There are two half-brothers who frequently talk about the pursuit of justice and the alleviation of
poverty, yet while simultaneously level false accusations against my company and me. The
elder brother previously served as a prime minister and is now a member of parliament. The
younger brother, whose profession is an automotive engineer, was employed at our company
for about a year before being dismissed in the spring of 2012. Shortly after his departure, he
was appointed as the deputy director of Erdenes Tavan Tolgoi, a coal company, where he
worked for five years.
In an act of extortion, they demanded 10% of Achit Ikht's shares and 7.8 billion tugriks as a
bribe. Angered by their unsuccessful attempt, they spread baseless allegations and
accusations, which, with the involvement of a former Prime Minister and directed by a minister,
prompted a comprehensive investigation into all our operations. Yet, they are still dissatisfied.
They launched false allegations not only using a parliamentary seat and government positions,
but also at a courtroom podium while standing accused for crimes of their own. They tried to
manipulate officials in the government for their cause. Now they are trying to wriggle into
influential individuals of the ruling party to get their hands dirty and are lead them on a merry
chase. How true is the saying that ‘There lies a petty personal interest behind every grand
proposition of a Mongolian.’
Esteemed Mr. President,
 
I doubt that this fabricated case, involving both politics and narrow self-interests of individuals,
can be resolved with fairness and justice by those who have been tasked to carry out orders.
Our company is not only a national producer that employs advanced mineral processing
technology to produce export products but also the Mongolia’s only member of the
internationally-known London Metal Exchange, consistently ranking among the Mongolia’s Top
100 enterprises for tax contribution, employment, and social responsibility. Therefore, I implore
you to stand with a national producer and put an immediate end to this illegal, coercive
operation based on slander and misinformation so that we continue our operation without any
hindrance. Moreover, I formally request your assistance establishing an independent working
group comprised of well-recognized Mongolian and foreign lawyers and professionals to
perform an independent evaluation for the open review and discussion by the public, thereby
unveiling the truth.
I am fully prepared to cooperate in any way.
I do believe that the rule of law will prevail in a good government, allowing creative, hard-
working people to develop Mongolia. Although I withdrew from the political arena and shifted to
the private sector long ago, I have not abandoned my research activities. For the past few
months, I have been pondering and running a team on a research project of how to completely
eradicate - not just reduce - emissions in the capital city. I am keen to present this initiative to
you upon my arrival in Ulaanbaatar.

Respectfully,
 
Tsagaan Puntsag