guildford coal troubles in mongolia

I have received some disturbing news about Guildford Coal's South Gobi project in Mongolia.

Here is a text of a letter circulating among investors in mining stocks in Mongolia:

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On September 9 this year, a drunk driver called B.Altangerel driving a Land Rover jeep has run over a ger tent of B.Otgontulga, a female herder living in Mongolia’s remote South Gobi province, killing an entire family of four people, including three young children and a woman.

The drunk driver who committed this terrible crime was a contractor working for the Australian coal exploration company Terra Energy LLC, a subsidiary of Australia's Guildford Coal. The contractor company itself where he worked was yet another foreign mining company called Polaris Corporation LLC.

This unprecedented crime has aroused angry passions and outcry both in the local community and throughout the country.

Clumsy attempts by the Terra Energy LLC director Peter Goodman to distance from the crime and its perpetrator, lack of apology or compensation to the victims family and even a veiled attempt to bribe local officials into forgetting this crime further inflamed sentiments.
Mongolia has a long history of popular resistance to foreign mining companies. In neighbouring Inner Mongolia region of China, an incident last year when a Chinese driver killed a Mongolian herder caused months of riots and demonstrations which ultimately forced the Chinese Communist leadership to issue an apology, close dozens of coal mining companies and give a death sentence to the driver.

Will the South Gobi incident cause a similar crisis against Australian mining companies in Mongolia?

On Mongolian internet sites, there are already calls to cancel mining licenses of Terra Energy.

In May next year, Mongolia will held presidential elections and in election year Mongolian politicians are very sensitive to public opinion which in this case is firmly against the Australian company.

Unless the Guildford Coal and its subsidiaries and contractors move quickly to issue an apology and compensation to the victims, its multi-million dollar South Gobi project and planned IPO of its subsidiary Terra Energy will fail causing tremendous losses to their investors.

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